Wisconsin Tribes Set to Pick Up a Big Win Against Kalshi

Kalshi won’t be forced out of Wisconsin quite yet, but it did pick up a significant legal loss in America’s Dairyland this week. 

A federal judge has rejected a request from Wisconsin tribes for a preliminary injunction against Kalshi, allowing the prediction platform to remain active in the state. However, the judge also ruled that a lawsuit by Wisconsin tribes accusing the operator of violating the Indian Gaming Regulatory Act could continue. 

While the rulings mean that Kalshi won’t be forced to suspend operations, it does set up a long and dangerous legal fight in this midwestern market.

Kalshi Violating IGRA in Wisconsin

In his ruling, US District Judge Conley made a significant statement that could haunt Kalshi for years to come. That’s because the ruling found that Kalshi is violating IGRA, which allows tribal gaming across the US. This means the state’s tribes can move forward with their lawsuit seeking to force the operator out. 

Regardless of what happens next in Wisconsin, the ruling will become a key part of several ongoing lawsuits between tribal gaming groups and the sports prediction industry. We’ve also seen tribes in New Mexico quickly file similar lawsuits after the ruling came down, and more could soon follow.

It remains likely that other lawsuits will determine the outcome of the fight over prediction markets; the ruling is an ominous sign for the embattled industry.

Judge Doesn’t See Evidence for Injunction

While US District Judge believed Wisconsin’s gaming tribes have the right to sue Kashi, he didn’t believe an injunction was warranted. While he acknowledged that tribes may be losing money to Kalshi’s sports prediction markets, his ruling cited a lack of evidence showing the true impact. 

While one might infer some loss of revenue, plaintiff’s assertions about current monetary harm, much less of a magnitude to present a risk to the Nation’s economic livelihood, are largely unsupported by any evidence. Rather, it would seem likely that any interim loss is marginal at best and compensable at worst.

Kalshi Also Faces Lawsuit From Wisconsin

Wisconsin tribes aren’t the only opponent Kalshi needs to worry about in the Cheese State. Wisconsin Attorney General Josh Kaul recently filed a lawsuit against the operator and Robinhood over their sports prediction markets. 

In the filing, Kaul accuses both operators of offering an illegal form of gambling.

Kalshi, Robinhood, and Coinbase use a fig leaf to disguise the casino-style sports betting they facilitate in Wisconsin. Parties to these ‘event contracts’ wager money on whether a given sports-related outcome will occur, just as when people bet on that same outcome using traditional casino-style sportsbooks.