Kalshi has scored a major legal win against tribal gaming interests after a US federal court denied a preliminary injunction against it filed on IGRA grounds.
In a decision published yesterday (10 November), the judge sided with the prediction market, which has been in the firing line from various gaming interest groups due to offering sports contracts which its critics characterise as online gambling.
It follows three federally recognised Indian tribes suing the business in July for allegedly offering illegal sports gambling on tribal reservations, in violation of the Indian Gaming Regulatory Act (IGRA), which provides the federal framework for Indian gaming in the US.
A Kalshi spokesperson said: “We welcome today’s decision denying the plaintiff tribes’ motion for a preliminary injunction. Kalshi’s nationwide, federally-regulated exchange offers all users a fair and transparent way to trade event contracts. Casinos located on tribal lands offer their customers a fundamentally different product.”
Judge Jaqueline Corley wrote that the tribes did not have a likelihood of success on the merits of their claim and so denied their request for an injunction which would have blocked the business offering sports contracts on tribal land.
She did so by arguing the Unlawful Internet Gambling Enforcement Act, which prohibits companies taking internet bets, as well as the Commodity Exchange Act, governed Kalshi’s event contracts – which the court did not have jurisdiction to rule on.
Court ‘does not take lightly’ Kalshi effects on tribal sovereignty
However, the court also included a note of warning for the prediction market, hinting the business’ critics might have had a point.
The judge wrote: “As a final note, the court does not take lightly plaintiffs’ concerns about the effects Kalshi’s activities might have on tribal sovereignty and the Tribes’ finances.
“Indeed, by self-certifying the legality of its event contracts in a way that insulates its activities from judicial review, Kalshi may have found a way around prohibitions on interstate gambling that were created with the Tribes’ best interest in mind.
“But, on the record currently before the court, and in light of the Commodity Exchange Act’s self-certification process, Plaintiffs have not met their burden of showing a likelihood of success on their IGRA claim.”
The victory comes as the business is engaged in a variety of other lawsuits about the legality of its event contracts, including with several state gaming regulators.