- Details
- By Chez Oxendine
- Gaming
A federally regulated online exchange is asking a New Mexico court to throw out a tribal lawsuit that targets its sports‑event prediction markets.
Kalshi, a prediction market operator being sued in Mescalero Apache Tribe et al. v. Kalshi Inc., filed a motion to dismiss, arguing the tribes lack the authority to regulate or penalize a nonmember business operating entirely off tribal lands.
The company says its event‑contract platform is overseen exclusively by the Commodity Futures Trading Commission and cannot be subjected to tribal gaming rules. The motion relies heavily on the Supreme Court's 1981 Montana v. United States decision, which limits tribal civil regulatory authority over nonmembers in most circumstances.
The tribes sued in May, alleging Kalshi is running unauthorized Class III gaming on their lands by allowing users on reservations to place sports‑related wagers through its app. Their complaint says the Indian Gaming Regulatory Act, or IGRA, incorporates tribal gaming ordinances into federal law and gives tribes authority to enforce those rules against outside operators.
The motion to dismiss comes amid a wider array of lawsuits filed by tribes and states challenging sports-related prediction markets, per prior Tribal Business News reporting. The complaints center on Kalshi’s sports event contracts, which tribes argue undermine gaming exclusivity under tribal-state compacts in states where sports betting is legal and violate state gambling laws where it is not.
As legal challenges mount, the CFTC has proposed a rule that would protect operations like Kalshi from state and tribal interference even as the agency itself intends to take a ‘hands-off’ approach to the wildly expanding markets.
