Another tribe is following lead of a group of California tribal gaming interests and taking Kalshi and Robinhood to court with RICO charges.
The Ho-Chunk Nation of Wisconsin sued both financial firms in the Western Wisconsin District Court, alleging the same violations as the California case did. Those include violating the Indian Gaming Regulatory Act (IGRA), false advertising and racketeering and corruption charges for working together to offer sports-related event contracts on Indian lands.
Essentially, the lawsuit claims that the sports contracts Kalshi partners with Robinhood to offer are Class II gaming and, accordingly, cannot be offered on tribal lands by groups besides the tribes themselves. The suit also drew attention to a range of Kalshi advertisements overtly referring to the product it offers as betting.
Suit alleges Kalshi is taking advantage of CFTC void
The lawsuit makes several of the same points made in the California suit. It also includes a detailed timeline of actions by Kalshi, making several jabs at the overlap between Kalshi hires and the Trump Administration.
The brief spends ample time noting that the departure of a number of key Commodity Futures Trading Commission (CFTC) officials, creating a void in leadership that President Donald Trump aims to fill with pro-crypto and pro-sports contract nominee Brian Quintenz. As the weeks extend into months with no new leadership, Ho-Chunk claims there is an obvious vacuum of leadership Kalshi and Robinhood are taking advantage of with an increasingly broad offering of self-certified sports event contracts.
The claim does not mince words at all:
“On information and belief, Kalshi has been prolific in offering sports event contracts with the knowledge that the legality of their sports event contracts is highly questionable and widely criticized as an impermissible form of sports gaming or gambling, at a time when power in the CFTC is being consolidated in one commissioner, Quintenz, a Kalshi board member, with the knowledge that the CFTC is understaffed and lacks the resources to adequately review and regulate Kalshi’s self-certified contracts to ensure compliance with the Commodity Exchange Act (CEA).
As a direct result of these events, Kalshi has been able to avoid regulation of its sport gambling activities by the CFTC.”
Ho-Chunk wants court to declare sports contracts violate CEA
The tribal group is seeking the court to declare these contracts to be outside the scope of the CEA and to bar the offering of such contracts on or near Indian lands on both a preliminary and permanent basis. Ho-Chunk is also seeking damages in addition to injunctive relief.
This marks a fifth state where Kalshi is embroiled in a lawsuit with either a regulator or tribal groups. It is the second in which Kalshi is the defendant rather than the plaintiff.
Robinhood is starting to rack up the court costs as well. The company filed suit against Nevada and New Jersey regulators for serving the company a cease and desist letter trying to push the group from offering sports contracts in the state.
