A federal judge in Wisconsin has handed Native American tribes their first legal victory under the Indian Gaming Regulatory Act (IGRA) against prediction-market operator Kalshi, ruling that the Ho-Chunk Nation is likely to prevail in its lawsuit seeking to block sports event contracts on tribal land. The decision, issued on May 11, 2026, by U.S. District Judge William M. Conley of the Western District of Wisconsin, marks a significant shift in the federal landscape surrounding the intersection of tribal gaming and event-based derivatives.
Key Ruling and Background
The Ho-Chunk Nation sued Kalshi Inc., KalshiEX LLC, Robinhood Markets Inc., and Robinhood Derivatives LLC in August 2025, alleging that the companies' offering of sports event contracts on the tribe's Indian lands violates IGRA. The tribe filed for a preliminary injunction in December 2025, seeking to halt the contracts during the litigation. Judge Conley granted the motion, finding that the tribe demonstrated a likelihood of success on the merits. Sixteen tribes backed the Ho-Chunk Nation with an amicus brief.
The ruling directly contradicts a November 2025 decision by U.S. District Judge Jacqueline Scott Corley in the Northern District of California, who denied a temporary restraining order sought by three other tribes—Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians. Corley held that those tribes had not met their burden of showing a likelihood of success on their IGRA claim, though she acknowledged the seriousness of their sovereignty and financial concerns. That case is now on appeal before the Ninth Circuit.
Judge Conley's order is the first federal precedent siding with tribes in the nationwide IGRA litigation against Kalshi, which has expanded to include multiple states and tribal entities. The Ho-Chunk case also includes a Racketeer Influenced and Corrupt Organizations (RICO) Act claim, characterizing Kalshi's sports event contract business as a “Gaming Racket,” along with false advertising allegations. A trial is scheduled for May 24, 2027, before Conley.
Kalshi’s Defense and Federal Preemption Arguments
Throughout the litigation, Kalshi has argued that its status as a Designated Contract Market (DCM) regulated by the Commodity Futures Trading Commission (CFTC) preempts IGRA. The company cites the 2006 Unlawful Internet Gambling Enforcement Act, which exempts DCM-traded contracts from the federal definition of “bet or wager,” as well as the CFTC's self-certification process for new event contracts under the Commodity Exchange Act. These arguments mirror the defense Kalshi successfully used in earlier prediction-market enforcement cases before Judge Corley.
Despite Kalshi's federal preemption claims, Judge Conley found that IGRA's protections for tribal gaming on Indian lands remain applicable. The ruling underscores the tension between CFTC-regulated derivatives and tribal sovereignty rights under federal law.
State-Level Enforcement and Federal Counter-Lawsuits
The Wisconsin ruling runs parallel to separate state enforcement actions. On April 23, 2026, Wisconsin Attorney General Josh Kaul filed three state lawsuits in Dane County Circuit Court against Kalshi, Robinhood, Polymarket, Crypto.com (operating as Foris Dax Markets), and Coinbase, alleging that their sports-related offerings violate Wisconsin's Class I felony gambling statute. Kaul stated in a virtual press conference that “thinly disguising unlawful conduct doesn’t make it lawful” and called for the companies to be “shut down” from offering sports event contracts to Wisconsin customers.
In response, the CFTC sued Wisconsin and four other states, characterizing the state actions as interference with federal regulatory authority over derivatives markets. The federal agency argued that states cannot unilaterally ban CFTC-regulated contracts. The Wisconsin attorney general's office has defended its actions, asserting that gambling regulation is a traditional state police power.
Fragmented Federal Landscape
Judge Conley's decision adds to a fragmented array of preliminary rulings on Kalshi's sports event contracts. The company holds a Third Circuit-affirmed injunction in New Jersey, which blocks state enforcement against its contracts. However, Kalshi has lost similar motions in Maryland, and its Nevada injunction was dissolved on review. The Ho-Chunk ruling may embolden other tribes to pursue IGRA claims and could influence pending appeals in the Ninth Circuit.
Kalshi has not yet publicly responded to the Wisconsin ruling. The case continues to highlight the legal gray area between online prediction markets and tribal gaming regulations, as well as the broader debate over state versus federal authority in the derivatives space. With a trial set for May 2027 and parallel state proceedings, the Ho-Chunk Nation's lawsuit could set a landmark precedent for tribal sovereignty in the age of event contracts.