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California tribes sue Kalshi and Robinhood
Three Native American tribes in California sued prediction market operator Kalshi and trading platform Robinhood over alleged illegal sports betting.
The Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians filed the lawsuit in the US District Court for the Northern District of California on July 22, requesting preliminary and permanent action to prevent the companies from offering prediction markets on tribal lands.
The lawsuit states:
“Kalshi is engaging in sports gambling as defined by the IGRA and the Tribes’ Compacts, Procedures, and Ordinances.”
The tribes also mention violations of the Federal Wire Act and Racketeer Influenced and Corrupt Organizations (RICO) Act.
The statement includes that Kalshi markets itself as “The First Nationwide Legal Sports Betting Platform,” which offers contracts on outcomes such as sports championships and individual game outcomes.
The lawsuit continues:
“Kalshi will claim that it is not offering sports gambling. Kalshi will tell the Court that it is a Designated Contract Market, regulated exclusively by the Commodities Futures Trading Commission (CFTC), and is merely operating a ‘prediction market’ that permits the buying and selling of ‘commodities contracts,’ or swaps on sporting events.”
The tribes argue that these event contracts are nothing more than illegal, unregulated bets on the outcomes of sporting events.
A Robinhood spokesperson shared in a statement to Front Office Sports:
“Our event contracts are regulated by the CFTC and offered through Robinhood Derivatives, LLC, a CFTC-registered entity, allowing retail customers to access prediction markets in a safe, compliant, and regulated manner. So far, two federal courts have made initial rulings that the CFTC’s rules preempt other laws, and we intend to defend ourselves against these claims.”
Kalshi has previously received cease-and-desist letters from regulators in Maryland, Illinois, Montana, Nevada, New Jersey, and Ohio, and has filed lawsuits in several of those states. Other lawsuits were filed in Kentucky, Ohio, Massachusetts, Illinois, and South Carolina, as residents seek to recover gambling losses allegedly incurred on Kalshi, Robinhood, and related platforms.
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