- On Monday, a Wisconsin federal court ruled that Ho-Chunk Nation could sue Kalshi for offering sport event contracts on Tribal lands.
- This could set a precedent for other states with local tribes, as they may follow suit in suing prediction markets.
MADISON, Wisc. – The U.S. District Court for the Western District of Wisconsin made a ruling on Monday, stating that the Ho-Chunk Nation can sue Kalshi for violating its Tribal-State compact.
The key piece of this ruling is that the court classified Kalshi’s sports based contracts as Class III gaming, which differs from Kalshi’s definition of their own contracts, which they call “information markets” or “derivative contracts.”
This has become a point of contention for all prediction markets, as it is the ultimate factor in whether or not they will continue to be allowed to offer contracts for sporting events. There has yet to be a definitive ruling as to whether or not they should follow traditional sports betting rules.
“On Tribal Lands”
Outside of denying that their platform is a form of sports betting, representatives at Kalshi also argue that the definition of betting “on Tribal lands” is murky, suggesting that it may be more pertinent to consider where the servers are, rather than the person wagering.
However, the official statement from the court covered this, stating, “The fundamental problem with defendant’s argument is that the Supreme Court has already held in deciding whether gaming occurs on Tribal lands under IGRA, that courts must look to where the users who are gaming are located.”
The vast majority of sports betting in Wisconsin does not take place on Tribal lands, but there is still enough for it to draw attention to the matter.
Setting A Precedent
The ruling of this case could play a major role in cases across the country, as prediction markets have stirred up a lot of controversy over whether or not they should be allowed, especially in relation to legal sports betting sites since they do not follow traditional sports betting laws.
Though it would take further measures for most states, other states with tribal casinos, such as Florida, California, and Oklahoma would now have precedent to sue Kalshi as well, given the fact that a Wisconsin federal court ruled in favor of the Ho-Chunk Nation.
The case is not over and it is not yet a definitive win for Ho-Chunk Nation, but the ruling in their favor is a huge step forward in further regulation and restrictions on prediction markets going forward.
