Three federally recognised California tribes—the Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians—have filed a federal lawsuit against Kalshi and Robinhood. They allege that the companies are offering illegal sports betting disguised as “event contracts”, thereby violating tribal sovereignty and federal law.
Overview of the lawsuit
The lawsuit, filed in the U.S. District Court for the Northern District of California, centres on Kalshi’s event contracts, which allow users to trade on real-world outcomes such as sports results. The tribes argue that these contracts constitute unregulated gambling and are being offered through Robinhood’s platform, including to users located on tribal lands.
Under the Indian Gaming Regulatory Act (IGRA) of 1988, gambling on tribal lands is categorised into three classes. Class III includes 바카라-style games and sports betting, which require formal agreements between tribes and state governments. The tribes claim that Kalshi’s contracts fall under Class III but are being offered without the required agreements.
Tribal-state compacts and sovereignty
Each tribe has a compact with the state of California that outlines permitted gambling activities. The tribes argue that digital sports betting via a trading app is not authorised under these agreements. They also assert that unauthorised gambling on tribal lands undermines their legal authority and self-governance.
The lawsuit includes charges under the Racketeer Influenced and Corrupt Organisations (RICO) Act, alleging that Kalshi and Robinhood established a business to profit from unlawful gambling. It also includes allegations of wire fraud, contending that the use of digital infrastructure to evade regulatory oversight could endanger users, including minors.
that Robinhood and Kalshi could restrict access to their services on tribal territories by using geolocation technology. They cite GeoComply, a tool already employed by legitimate sportsbooks, as a viable—though untested—solution.
What the tribes are demanding?
Citing unapproved gambling activities, the tribes are seeking legal action to prevent Kalshi and Robinhood from operating on their territory. Additionally, they are requesting financial reparations for past losses and the implementation of geofencing technology to restrict access. Their primary aim is to protect their regulatory authority and uphold tribal laws.
Delaying CFTC leadership
The lawsuit has also impacted the confirmation process for Brian Quintenz as chairman of the Commodity Futures Trading Commission (CFTC). Tribal leaders have called for a review of the legality of sports-related event contracts before his appointment proceeds. The tribes argue that unauthorised digital betting platforms divert revenue from essential services, particularly in rural areas where gaming income is a vital economic driver. They note that other online sportsbooks have complied with tribal and state laws using available technology and question why Kalshi and Robinhood have not done the same—raising concerns about accountability and regulatory compliance.
Wider legal and political context
This case arises in the broader context of debates over the legitimacy of prediction markets in the United States, following the 2018 repeal of the Professional and Amateur Sports Protection Act (PASPA), which allowed states to legalise sports betting. Kalshi maintains that its services are not gambling but rather financial instruments. Nevertheless, concerns about the misuse of event contracts have been raised in previous legislative discussions.
The outcome of this case could influence how prediction markets are regulated across the U.S. Other states, including Maryland, Nevada, and New Jersey, are also reviewing Kalshi’s business model. The tribes argue that geofencing limitations cited in other cases do not apply to tribal lands, where more precise tools are available.
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