The Maryland lawsuit involving Kalshi has drawn the interest of tribes both inside and outside the state, but the prediction markets operator does not want them involved.
After a coalition of 27 federally recognised Indian tribes and seven tribal associations (together termed the amici tribes) filed a motion for leave to file an amicus brief in the U.S. District Court for the District of Maryland on Monday, Kalshi submitted a statement of opposition to the motion on Tuesday.
In its filing, the trading platform argued that tribes missed a crucial deadline and did not add any important new information to the case, so the court should reject the request.
Tribes’ motion ‘untimely and unhelpful’ to case, says Kalshi
Typically, amicus briefs must be filed within seven days of the initial suit, unless the court provides otherwise. The tribes’ brief was submitted more than a month after the defendants’ opposition to Kalshi’s preliminary injunction motion and after the court heard argument, Kalshi asserted the motion is too late to be considered since its response to Maryland regulators arguments to reject the injunction is due in two days.
Additionally, Kalshi dismissed the idea that the lodged brief would be useful to the court as the group of tribal parties had no stake in whether or not Kalshi should comply with state gaming laws.
“Kalshi wishes to be accommodating of parties claiming an interest in the ongoing preemption litigation, and has consented to all amicus briefs in the now-pending Third Circuit appeal,” wrote the company. “But this putative amicus brief is untimely and unhelpful. Kalshi respectfully requests that the Court deny the motion.”
What did tribes say?
The group of tribal associations hoping to file an amicus brief in the Maryland case alongside the federally recognized tribes themselves includes the Indian Gaming Association (IGA), the California Nations Indian Gaming Association (CNIGA) and similar groups in Arizona and Oklahoma, the National Congress of American Indians (NCAI) and others.
The amici tribes collectively opposed Kalshi’s motion for a preliminary injunction against the Maryland Lottery, aiming to keep the state from enforcing a cease-and-desist order against the firm.
The crux of the argument against Kalshi being allowed to operate sports event contracts, both in Maryland and several other states, is that Kalshi’s sports-related event contracts are tantamount to unauthorized sports betting. The overarching question is whether these types of event contracts are permissible under the Commodity Exchange Act (CEA) and the Commodity Futures Trading Commission (CFTC) federal regulatory body and that oversight supersedes the need to abide by state gaming laws.
The tribes also contend that their tribal sovereignty, as outlined in the Indian Gaming Regulatory Act (IGRA), is compromised by such offerings.
The tribes acknowledged the delayed filing, but argued since a judge hadn’t ruled on the injunction request, there was still time to consider their brief.
Here’s looking at you, New Jersey
The content of the Maryland filing is very similar to a filing from more than 60 tribes and tribal organizations in the U.S. Court of Appeals for the Third Circuit, a case in which New Jersey state authorities appealed a lower court decision to grant a temporary injunction to Kalshi and allow the company to stay online in the Garden State.
Both briefs argued that the CFTC’s own language makes it clear that its ban on gaming contracts is in line with Congress’s intention to “prevent gambling through the futures markets” at a federal level, as well as to protect the public interest from gambling.
Kalshi, though, disputes that, saying the special rule related to the issue is constructed as an either/or situation compared to the tribe’s if/then reading of the law. In essence, Kalshi argues that a contract deemed to be gaming but not in the public interest would be banned, but one that ticks both boxes would not.
The tribes’ brief says no, based on the notion that the CFTC has already made the public interest determination and therefore does not need the second prong of the process.
Could the tribes themselves sue Kalshi?
Meanwhile, Sportico reported on Monday that tribal groups are warming to the idea of filing their own lawsuit against Kalshi.
The outlet adds that IGA conference chair Victor Rocha took issue with a public statement from Kalshi wherein the company claimed to have had “productive conversations with several tribes” and said it intended to respect their sovereignty.
Rocha told Sportico that he held two calls with Kalshi CEO Tarek Mansour, one solo and one with other tribal leaders, and came to the conclusion that the company’s leader is “a lying little twerp.” CNIGA Chair James Siva added that on the group call, the tribes and Mansour disagreed on all the key points at hand.
Kalshi maintains that nothing in the CEA prevents tribes from continuing to operate gambling on their sovereign lands. At a hearing on June 10, President Donald Trump’s nominee for CFTC Chair, Brian Quintenz, suggested that the CEA doesn’t impede tribes from offering event contracts on their own lands either.
