A coalition of three federally recognized California tribes has filed a federal lawsuit accusing prediction market operator Kalshi and trading platform Robinhood of facilitating illegal sports gambling that infringes upon tribal sovereignty and violates both federal and state law.

Filed in the U.S. District Court for the Northern District of California, the lawsuit brings together the Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians. The tribes are seeking preliminary and permanent injunctions to bar Kalshi and Robinhood from offering sports betting-style event contracts that are accessible on tribal lands. The tribes claim this activity is in direct violation of the Indian Gaming Regulatory Act (IGRA), the California Constitution, and the specific tribal-state gaming compacts that govern gambling on Indian reservations.

Event Contracts Viewed as Disguised Sports Wagers

At the heart of the complaint is the claim that Kalshi’s so-called “event contracts” are merely a rebranding of sports betting. While Kalshi maintains that its offerings fall within legal futures markets, the tribes argue that the contracts serve as unregulated sports wagers, available through Robinhood’s app in partnership with Kalshi.

“While masquerading as novel commodities and futures products, these event contracts are, substantively, nothing more than illegal, unregulated wagers on the outcomes of sporting events,” the tribes stated in their filing.

The plaintiffs emphasize that this type of gambling undermines the legal framework established by the IGRA, which governs the conditions under which tribes may operate gaming enterprises. Under IGRA, tribes must negotiate compacts with state governments and follow federally approved procedures in order to legally run Class III gaming—such as sports betting—on their lands. The compacts for each of the three tribes in this case prohibit such activity unless authorized through those formal agreements.

RICO Allegations and Tribal Sovereignty

Beyond accusations of unauthorized gambling, the tribes have also brought forward Racketeer Influenced and Corrupt Organizations (RICO) Act claims against Kalshi and Robinhood. They allege the two companies formed a coordinated effort to conduct and profit from what they say amounts to unlawful gambling through a system of “wire fraud.”

The complaint asserts that Robinhood’s integration of Kalshi’s prediction markets into its app exposes users—including minors and residents on tribal lands—to unregulated gambling without age verification, licensing, or consumer protections. The tribes argue this technological loophole infringes on their ability to enforce their gaming laws and undermines their sovereign authority.

According to the complaint, “GeoComply’s technology is fully capable of accurately geofencing tribal lands, and in fact, this capability is already being utilized in several states,” making it feasible for Kalshi and Robinhood to restrict access to these services on reservations.

Legal History and Regulatory Landscape

The current dispute reflects broader tensions in the evolving U.S. gaming environment. While the Supreme Court’s 2018 decision to strike down the Professional and Amateur Sports Protection Act opened the door to state-regulated sports betting, tribes assert that companies like Kalshi are circumventing necessary regulatory safeguards under the guise of offering commodity-based event contracts.

Quoting former Senator Blanche Lincoln, who once insisted that event contracts should not be used for gambling purposes during debate on the Dodd-Frank Act, the tribes point to shifting political positions and question the intent behind Kalshi’s business model. The tribes also cite examples of Kalshi’s marketing that openly promotes betting on sports outcomes, further supporting their argument that the company’s services are equivalent to traditional sports wagering, not legitimate financial hedging tools.

Broader Industry Implications and Political Backdrop

The case emerges amid ongoing scrutiny of Kalshi’s operations across several jurisdictions. In separate legal proceedings in states like Maryland, Nevada, and New Jersey, courts have considered the legal boundaries of Kalshi’s prediction markets. In past rulings, Kalshi claimed that technological and financial burdens prevented the company from excluding entire states or territories from its offerings. However, the tribes contend this defense is insufficient, especially given that many regulated sportsbooks already implement geofencing to comply with state and tribal laws.

The lawsuit’s outcome could have wide-reaching implications. Tribal representatives and other stakeholders in the gambling industry are also urging the U.S. Senate to delay the confirmation of Brian Quintenz as chairman of the Commodity Futures Trading Commission (CFTC) until he commits to re-evaluating the legality of sports-related event contracts. The Senate Agriculture Committee recently postponed a scheduled vote on Quintenz due to the absence of a committee member.

Asserting Legal and Regulatory Authority

Each of the plaintiff tribes operates gaming operations under carefully negotiated compacts and federal oversight. The Blue Lake Rancheria oversees gaming on its 26-acre reservation in Humboldt County. The Chicken Ranch Rancheria of Me-Wuk Indians administers gaming on 40 acres in Tuolumne County, while the Picayune Rancheria of the Chukchansi Indians manages gaming operations in Madera County.

The tribes argue that Kalshi and Robinhood’s actions interfere with their ability to enforce gaming laws on lands held in trust by the United States for their benefit. They assert that unregulated digital gambling undermines their community welfare policies and strips them of jurisdictional control.

The plaintiffs are seeking both financial compensation and a court order requiring the defendants to geofence tribal lands, effectively banning access to these betting services within reservation boundaries.