U.S. District Judge William M. Conley of the Western District of Wisconsin ruled on Monday that the Ho-Chunk Nation has demonstrated a “likelihood of success” in its lawsuit alleging Kalshi violated the Indian Gaming Regulatory Act (IGRA) by offering sports event contracts on tribal lands, according to Bloomberg Law. This marks the first federal ruling favoring a tribe in the nationwide IGRA litigation against Kalshi, reversing the pattern set by a California court last year.
Case Background and Core Dispute
The Ho-Chunk Nation, a federally recognized Native American tribe, filed the lawsuit in August 2025 against Kalshi Inc., KalshiEX LLC, Robinhood Markets Inc., and Robinhood Derivatives LLC. The tribe sought a preliminary injunction in December 2025 to block Kalshi and Robinhood from offering sports event contracts to users on tribal lands, supported by an amicus brief from 16 other tribes. The complaint includes a RICO claim characterizing Kalshi’s sports event contract business as a “gaming fraud” scheme, along with false advertising allegations. A trial is scheduled for May 24, 2027 before Judge Conley.
Overruling California Precedent, Federal Split Emerges
This ruling directly contradicts a decision from November 2025 by U.S. District Judge Jacqueline Scott Corley in the Northern District of California, who denied a temporary restraining order sought by Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians. Judge Corley found that the plaintiffs “failed to carry their burden of demonstrating a likelihood of success on their IGRA claim,” although she acknowledged concerns about tribal sovereignty. That California case is now on appeal in the Ninth Circuit.
Kalshi has consistently argued that its status as a CFTC-regulated Designated Contract Market (DCM) preempts IGRA, citing an exemption under the Unlawful Internet Gambling Enforcement Act (UIGEA) for DCM-traded contracts and the CFTC’s self-certification process under the Commodity Exchange Act. These arguments succeeded in California but failed in Wisconsin.
State-Level Enforcement and Federal Conflict
On April 23, 2026, Wisconsin Attorney General Josh Kaul filed three parallel cases in Dane County Circuit Court naming Kalshi, Robinhood, Polymarket, Crypto.com (operating as Foris Dax Markets), and Coinbase as defendants for facilitating sports betting alleged to violate Wisconsin’s Class I felony gambling laws. Kaul stated that “thinly veiling illegal conduct does not make it legal” and called for the platforms to “shut down.” The CFTC subsequently sued Wisconsin and four other states for interfering with federal regulatory authority over derivatives markets.
As of publication, Kalshi has not publicly responded to Judge Conley’s ruling. The decision adds to a fragmented federal landscape: the Third Circuit affirmed a ban in New Jersey; a ban in Maryland was denied; and a ban in Nevada was lifted after reconsideration. Arizona temporarily halted its prosecution of Kalshi following a federal judge’s emergency order.