August 6, 2025

Sports event contracts operators infringing on Tribal sovereignty and Tribal government revenue protected under the Indian Gaming Regulatory Act (IGRA) and key principles of federal Indian law and policy.

Maryland’s Lottery and Gaming Control Agency issued a cease-and-desist letter to KalshiEX LLC (Kalshi) in April 2025, stating Kalshi’s sports event contracts are indistinguishable from sports wagers and are therefore subject to state gaming regulation. Kalshi filed a complaint in federal court to prevent state enforcement action, and the court on August 1, 2025, rejected Kalshi’s bid for a preliminary injunction. This is especially important because federal district courts in New Jersey and Nevada have ruled in Kalshi’s favor, issuing preliminary injunctions to prevent state enforcement actions while those cases proceed.

Kalshi and similar operators have been conducting what is essentially unlicensed, unregulated nationwide mobile sports betting under the guise of sports event contracts. An event contract is a type of futures trading instrument with a payoff based on the outcome of a specific event—usually simply whether or not that event occurs—that is publicly traded on a prediction market regulated by the Commodity Futures Trading Commission (CFTC). Intended as risk management tools and traditionally used for events that could affect agricultural commodity pricing, operators like Kalshi are now applying event contracts to scenarios like sporting events.

Kalshi offers its sports event contracts everywhere, including on Tribal Nations’ Indian lands covered by IGRA. Despite having promoted them as sports betting in the past, Kalshi now argues: that its sports event contracts are not gaming at all; that they are governed by the Commodity Exchange Act (CEA), which Kalshi argues preempts state law; and that they are subject to the exclusive jurisdiction of the CFTC, not state regulators. There are multiple cases currently pending that challenge the use of sports event contracts to disguise mobile sports betting. In this case in particular, Kalshi has also argued that the CEA supplants IGRA, such that Tribal Nations that regulate gaming occurring on IGRA Indian lands cannot reach sports event contracts.

On August 1, 2025, the U.S. District Court for the District of Maryland ruled against Kalshi, finding that Kalshi was unlikely to succeed on the merits of its preemption arguments. The court wrote that, while the CEA has some preemptive authority, it was not intended to preempt state gaming laws. In reaching this conclusion, the court noted that accepting Kalshi’s argument would infringe on IGRA, and there was no evidence of congressional intent to do so.

USET SPF joined a Tribal amicus brief in this case along with 27 federally recognized Tribal Nations, the National Congress of American Indians (NCAI), the Indian Gaming Association (IGA), and several regional Tribal gaming associations. USET SPF has joined a similar Tribal amicus brief in KalshiEX LLC v. Flaherty et al., No. 25-1922, pending in the U.S. Court of Appeals for the Third Circuit (on appeal from the U.S. District Court for the District of New Jersey), on which we provided a litigation alert.

USET SPF has an overarching interest in upholding Tribal sovereignty in all forms, including the right to conduct economic development for the benefit of Tribal communities and economies. This case and others like it have high stakes for the future of Tribal gaming as a reliable source of Tribal government revenue, and a negative outcome could greatly weaken IGRA, which for many Tribal Nations has become a key tool in the exercise of Tribal sovereignty. The Tribal amicus brief in this case opposed Kalshi’s position, raising Tribal sovereignty and gaming concerns, arguing: that Kalshi’s sports event contracts are Class III gaming under IGRA; that the CEA does not preempt or impliedly repeal IGRA; and that therefore Kalshi’s activity in offering sports event contracts on Indian lands without IGRA authority is prohibited. The brief further argued that ignoring IGRA in this context raises serious policy concerns in violation of federal Indian law and policy, including infringing on Tribal sovereignty and regulatory authority and siphoning off critical Tribal government revenue.

KalshiEX LLC v. Martin et al., No. 1:25-cv-01283, in the U.S. District Court for the District of Maryland.

For more information, please contact Liz Malerba, USET SPF Director of Policy and Legislative Affairs, Katie Klass, USET SPF General Counsel, or Taylour Boboltz, USET SPF Staff Attorney.

Established in 2014, the USET Sovereignty Protection Fund (USET SPF) is a non-profit, inter-Tribal organization advocating on behalf of thirty-three (33) federally recognized Tribal Nations from the Northeastern Woodlands to the Everglades and across the Gulf of Mexico. USET SPF is dedicated to promoting, protecting, and advancing the inherent sovereign rights and authorities of Tribal Nations and in assisting its membership in dealing effectively with public policy issues.