Federal District Judge William M. Conley in Wisconsin ruled on May 11, 2026, that the Ho-Chunk Nation has demonstrated a “likelihood of success” in its lawsuit accusing Kalshi of violating the Indian Gaming Regulatory Act (IGRA) by offering sports event contracts on tribal territory. This marks the first federal ruling in favor of a tribe under IGRA against the prediction market operator, reversing the dominant trend from earlier tribal challenges.
Ruling Details and Significance
The Ho-Chunk Nation filed the suit in August 2025 in the U.S. District Court for the Western District of Wisconsin against Kalshi Inc., KalshiEX LLC, Robinhood Markets Inc., and Robinhood Derivatives LLC. The tribe sought a preliminary injunction in December 2025 to bar Kalshi and Robinhood from offering sports contracts to users on the tribe’s lands during litigation. Sixteen tribes submitted an amicus brief supporting the tribal position.
The decision overrides a November 2025 ruling by Judge Jacqueline Scott Corley in the Northern District of California, who denied a temporary restraining order requested by three California tribes. Corley held that the plaintiffs “had not met their burden of demonstrating a likelihood of success on their IGRA-based claim.” That ruling is now on appeal before the Ninth Circuit.
The Wisconsin case also includes a Racketeer Influenced and Corrupt Organizations Act (RICO) claim, characterizing Kalshi’s sports contract business as a “gambling fraud,” along with allegations of false advertising. Trial is scheduled for May 24, 2027, before Judge Conley.
Kalshi’s Defense and Regulatory Conflict
Kalshi argued throughout the Wisconsin litigation that its status as a CFTC-regulated designated contract market (DCM) preempts IGRA. The company’s attorney cited the UIGEA exemption for DCM-traded contracts from the federal definition of “bet,” along with the CFTC’s self-certification process for new event contracts under the Commodity Exchange Act. These arguments previously succeeded in blocking tribal injunctions in California.
However, Judge Conley found that IGRA’s specific provisions governing gaming on tribal lands cannot be overridden by DCM status. The ruling adds to a fragmented federal landscape: Kalshi has a confirmed injunction in New Jersey’s Third Circuit, lost similar motions in Maryland, and saw its Nevada injunction vacated upon review.
Parallel State Enforcement Actions
On April 23, 2026, Wisconsin Attorney General Josh Kaul filed three parallel state lawsuits in Dane County Circuit Court naming Kalshi, Robinhood, Polymarket, Crypto.com (operating as Foris Dax Markets), and Coinbase as defendants for facilitating sports wagers that violate Wisconsin’s Class I felony gambling laws. Kaul stated in a virtual press conference that “lightly disguising illegal conduct does not make it legal” and that companies should be “prevented” from offering sports event contracts to Wisconsin customers. Subsequently, the CFTC sued Wisconsin and four other states for what it called interference with federal regulatory authority over derivatives markets.
At the time of publication, Kalshi had not publicly responded to Monday’s ruling. The decision coincides with a temporary federal order blocking Arizona from proceeding against Kalshi, further illustrating the legal turbulence surrounding prediction market sports contracts in the U.S.