June 17, 2025

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

New Jersey gaming regulators issued a cease-and-desist letter to KalshiEX LLC (Kalshi) on March 27, notifying Kalshi it was violating state law by offering sports event contracts within the state. Kalshi filed a complaint to prevent state enforcement, and the lower court granted Kalshi a preliminary injunction on April 28. The New Jersey gaming regulators have appealed.

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 political elections and 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. In a related case arising in Maryland, Kalshi has argued that the CEA also supplants IGRA, such that Tribal Nations that regulate gaming occurring on IGRA Indian lands cannot reach sports event contracts either. There are multiple cases currently pending that challenge the use of sports event contracts to disguise mobile sports betting.

The Tribal amicus brief raises Tribal sovereignty and gaming concerns. The brief argues 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 argues 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.

In supporting this amicus brief, USET SPF has joined 60 federally recognized Tribal Nations, the National Congress of American Indians (NCAI), the Native American Finance Officers Association (NAFOA), the Indian Gaming Association (IGA), and several regional Tribal gaming associations. 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.

KalshiEX LLC v. Flaherty et al., No. 25-1922, in the U.S. Court of Appeals for the Third Circuit (on appeal from No. 1:25-cv-2152 in the U.S. District Court for the District of New Jersey).

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.