MADISON, Wis. (CN) - A federal judge denied the Ho-Chunk Nation's request to bar Kalshi and Robinhood from operating in Wisconsin amid claims the prediction markets illegally provide sports betting services on tribal lands.

The Ho-Chunk Nation sued Kalshi and Robinhood Markets in the Western District of Wisconsin in August 2025, claiming their event contracts product is constructively the same as online sports betting, which is prohibited in Wisconsin by the Indian Gaming Regulatory Act except when approved by tribal nations.

Kalshi executives maintain the site has nothing to do with gambling, but it is an online platform where users "trade on the outcome of real-world events," according to the company's website.

The Nation also says Kalshi's advertisements for "legal" sports betting amount to false advertising in violation of the Lanham Act, and that both Kalshi and Robinhood are engaged in criminal racketeering in violation of the RICO Act.

On Monday, U.S. District Judge William Conley agreed with the Nation that it has a right to sue Kalshi under the Indian Gaming Regulatory Act for prohibited sports betting activity, but denied its motion for preliminary injunction to halt Kalshi's operations in the state.

"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," the Barack Obama appointee wrote in the 30-page order. "Rather, it would seem likely that any interim loss is marginal at best and compensable at worst."

Conley noted that the Nation failed to bring any evidence showing a decline in attendance or revenue at its casinos, in consumer spending or even anecdotal evidence from a single customer stating they have turned to Kalshi's contracts as an alternative to the Nation's facilities.

The Nation must show irreparable harm to obtain a preliminary injunction. It argued in the alternative that Kalshi's actions interfere with the Nation's sovereignty, which Conley conceded could be significant.

However, interfering with the status quo in a complex case such as this with regulatory implications across the country is unnecessary here, Conley found.

Wisconsin Governor Tony Evers signed a bill legalizing online sports betting in early April, so long as the server or device used to conduct the wager is constructed on tribal land and aligned with tribal gaming compacts.

To participate, third party platforms can negotiate with tribal nations and the state to amend the compacts and create a plan that benefits all 11 federally recognized tribes equally.

While the bill is a major win for tribal nations in their battle against online prediction markets, platforms expressed frustration and resistance. Sports Betting Alliance attorney Damon Steward told Courthouse News at the time that platforms cannot afford to cut the tribes into their operations, and Wisconsinites will suffer for it.

Conley did not let Kalshi off entirely in Monday's order - the tribe's claim under the Indian Gaming Regulatory Act survived Kalshi's motion to dismiss.

The platform argued the tribe has no right to sue a third party under the act, and that the tribe and state can only sue each other as parties to the compact. "This reading appears without basis in the text, legislative history or common sense," Conley wrote.

Kalshi does not dispute its sports event contracts qualify as class III gaming under the Indian Gaming Regulatory Act, according to Conley, which prohibits class III gaming except under tribal-state compacts or with permission from tribal nations.

It also does not dispute in this case that a person could access its online platform on tribal lands, and that it is allowing such transactions without tribal permission or a binding compact with the government.

As such, the Nation has a clear right to sue for violations of the compact and gaming ordinances, Conley found.

Wisconsin Attorney General Josh Kaul filed a similar lawsuit in April on behalf of the state against several prediction market websites including Kalshi and Robinhood. Kaul claims the event contracts are indistinguishable from illegal sports betting.

"Kalshi, Robinhood and Coinbase use a fig leaf to disguise the casino-style sports betting they facilitate in Wisconsin," Kaul says in the 38-page complaint. "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."

The Ho-Chunk Nation is funding its litigation against Kalshi at least in part through donations from members and other tribes, according to its website.

Neither party could be reached for comment by press time.

Source: Courthouse News Service