Three California tribes sue Kalshi and Robinhood to get off their lawns
After obtaining amicus status in two of the three lawsuits involving event contract firm Kalshi, the tribal gaming community is taking legal action of its own.
A trio of California tribes have filed suit against both Kalshi and its partner Robinhood in the Northern California District Court.
Tribe claims Kalshi isn’t what Congress wanted
Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians are seeking the court to require the firms to geolocate tribal lands out of areas where their contracts are available. The group is also seeking treble damages for what it claims is false advertising, violating the Indian Gaming Regulatory Act (IGRC) and Racketeer Influenced and Corrupt Organizations (RICO) Act charges.
“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 complaint noted.
The arguments put forth in the argument mirror most of what the tribes have put forth in various amicus briefs. This one did spend more time focusing on Congressional intent, putting forth an argument that event contracts were intended to serve an economic purpose.
The brief included words of former Sen. Blanche Lincoln, who explicitly stated during the discussion of the Dodd-Frank Act that event contracts should not be vehicles for gambling.
Lincoln has since reversed course on that argument and is a registered lobbyist with Kalshi.
The brief similarly uses Kalshi’s own words about event contracts as vehicles for gambling during its arguments on election contracts to show a lack of consistency in its stance on the matter.
Finally, it provided ample evidence of Kalshi’s own advertising very openly trumpeting what it is offering to the public as sports betting.
“In resorting to this legal fiction, Kalshi seeks to blur the distinction between careful minimization and allocation of market risk and what, in reality, amounts to unregulated sports gambling, to such an extent that the preexisting regulatory regime that distinguishes futures from off-exchange betting cannot restrict their business,” the tribes argued.
RICO Suave
The RICO charges come into play because the tribes argued that the collaboration between Robinhood and Kalshi amounted to racketeering. Robinhood inked a deal to host Kalshi’s event contracts within its financial app. The brief claims this partnership is a collaboration to commit wire fraud an usurp the exclusive rights of tribes to offer Class III gaming in the state.
The tribal lands argument has come up in some of the other briefs but gets clear attention here, as the tribes argued these contracts amount to Class III gaming and can’t be offered on their lands.
In the Nevada and New Jersey cases, Kalshi convinced the court it would be a burden financially and technologically to geolocate the states out of their offering and would potentially jeopardize its status with the Commodity Futures Trading Commission (CFTC).
However, plenty of regulated sportsbooks do carve out these territories as part of the regulations of their various jurisdictions.
“GeoComply’s technology is fully capable of accurately geofencing tribal lands, and in fact, this capability is already being utilized in several states,” GeoComply SVP of Compliance Lindsay Slader explained in a statement to SBC Americas.
Meanwhile, the gambling world awaits a ruling on the injunction request in the Maryland court. Elsewhere, the industry, including a number of tribal groups, are pushing the Senate to block the confirmation of Brian Quintenz as chairman of the CFTC until he promises to evaluate the legality of sports contracts.
The Senate Committee Agriculture Nutrition and Forestry was supposed to vote on Quintenz on Monday, but delayed the vote when a Republican member of the committee was not available to attend. The committee is supposed to act on Quintenz before the August recess.
https://sbcamericas.com/2025/07/23/tribes-cali-kalshi-robinhood/