The US District Court for the Western District of Wisconsin (Madison) handed down a key ruling Monday concerning prediction markets on Monday. The decision will allow the Ho-Chunk Nation to pursue legal action against Kalshi, a platform that is non-compliant with the Indian Gaming Regulatory Act of 1988, according to tribal interests in the state.
Similar to many state gaming authorities, the Ho-Chunk Nation is specifically taking aim at Kalshi’s sports-related contracts, arguing that they offer illegal sports betting, disguised as forecasting, to constituents.
For states, precision market activity violates local gambling laws. For tribes, prediction markets violate tribal sovereignty along with the IGRA legislation that was signed by President Ronald Reagan in 1988.
On Monday, Judge William M. Conley ruled that the Ho-Chunk Nation of Black River Falls possesses the right to sue Kalshi for what it perceives to be unlawful sports gaming activity within its territory. The federal judge denied the tribe’s request for injunctive relief however. As a result, Kalshi can continue offering its services to individuals located on sovereign tribal lands for the duration of the legal battle.
READ: Ho-Chunk Nation v. Kalshi (full text – originally filed on August 20, 2025)
Although the views of tribal and state gaming interests are currently aligned against prediction markets that operate within the United States, their legal stances originate from separate legislation. State gaming authorities, particularly those which already regulate some form of sports betting, argue that platforms such as Kalshi circumvent existing infrastructure that taxes and oversees sportsbooks that legally operate in each statewide jurisdiction.
On the other hand, tribal gaming interests are federally regulated based on the Indian Gaming Regulatory Act of 1988, which recognizes tribes’ rights to operate gaming facilities and offer gaming-related products in their territories. In some cases, states offer “commercial” sports betting while forming exclusive “compacts” with tribes to ensure sports bettors can place wagers through the full statewide jurisdiction.
In other cases, such as Oregon, commercial online sports betting through the Oregon State Lottery is specifically geo-blocked on tribal lands. In the state of Washington, online sports bettors must physically visit a retail tribal casino if they want to place an on-premise legal online sports wager.
Legal activity surrounding the operation of prediction market exchanges in the United States has heated up in 2026. The CFTC is currently taking on the states of New York, Wisconsin, Connecticut, Illinois, and Arizona in an effort to protect its claim of exclusive jurisdiction over prediction markets.
Two weeks ago, New Jersey AG Jennifer Davenport led a coalition of 41 state attorneys general, who argue that state gambling laws should not be preempted by the federal government. Tribes see prediction markets exchanges as the “fastest-moving threat” to the industry since the signing of IGRA, and the American Gaming Association believes federal oversight of prediction markets undermines both state and tribal authority.
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