Three federally recognised tribes in California have filed a joint lawsuit in the US District Court for the Northern District of California against Kalshi and Robinhood.
The tribes, the Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians and the Picayune Rancheria of the Chukchansi Indians, allege in the lawsuit that the companies are conducting illegal sports betting.
Because the operations are available online, they are accessible on tribal lands, which the tribes claim is in direct violation of multiple federal and tribal regulations.
The complaint asserts that Kalshi and Robinhood have jointly launched an unregulated sports betting product in the form of event contracts.
According to the plaintiffs, this product enables users, including those situated on tribal reservations, to place wagers on the outcomes of sporting events through a prediction market integrated into the Robinhood platform.
The tribes argue this conduct violates the Indian Gaming Regulatory Act (IGRA), the California Constitution, and the specific compacts established between the tribes and the state government.
They argue that it also violates federal procedures established under IGRA for lawful gaming on Indian lands.
Under the IGRA, tribes are granted the authority to operate and regulate gaming on their lands if they do so in accordance with a tribal-state compact authorised by the US Department of the Interior.
The compacts and Secretarial Procedures for each of the plaintiff tribes explicitly prohibit sports betting.
By offering what the tribes contend are essentially sports bets through Kalshi’s event contracts, the companies are alleged to be infringing on tribal sovereignty and undermining the tribes’ regulatory frameworks.
The lawsuit seeks both preliminary and permanent injunctions to halt Kalshi and Robinhood’s activities within tribal jurisdictions.
The tribes argue that the companies’ operations amount to illegal gambling under federal and tribal law.
They also assert that the unregulated nature of the event contracts exacerbates risks associated with problem gambling, corruption in sports, and loss of tribal governance authority.
In response to the allegations, a Robinhood spokesperson told nextpredict.io/: “Robinhood’s 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.”
Suit alleges insufficient consumer protection
The tribes’ filing describes a marked shift in the US betting landscape following the Supreme Court’s 2018 decision to strike down the Professional and Amateur Sports Protection Act (PASPA).
Since then, legal and regulated sports betting has continued to expand, requiring age verification, licensing, and consumer protections.
The complaint argues that the Kalshi-Robinhood partnership circumvents these safeguards and allows widespread, unregulated sports betting, including by underage users, through digital platforms.
Kalshi has repeatedly argued that it does not offer sports betting, but the lawsuit argues that the event contracts function in practice as wagers on sports outcomes.
Therefore, the tribes assert that the operations fall under the definition of sports betting as interpreted by tribal compacts and federal law.
The complaint emphasises the inherent legal dichotomy between Kalshi’s federal registration and the specific limitations imposed by the IGRA and tribal law.
The tribes argue the IGRA’s provisions require strict compliance with tribal compacts and prohibit any unauthorised gaming activity on Indian lands, even if such activity is ostensibly legal in the broader federal regulatory framework.
Further, the tribes allege that the proliferation of unregulated sports gambling through mobile apps is placing unique pressure on tribal sovereignty.
They contend that the availability of betting on phones and devices, even by minors located on reservations, disrupts their capacity to enforce gaming laws, protect community welfare, and preserve the integrity of self-governance.
This technological shift presents a legal conundrum, as traditional enforcement mechanisms may not adequately address the borderless nature of online gambling and betting.