Wisconsin: Ho-Chunk Nation sues Kalshi, Robinhood over alleged illegal sports betting

The Ho-Chunk Nation of Wisconsin has sued online exchange Kalshi and brokerage Robinhood, accusing them of running illegal sports gambling operations on tribal lands in violation of federal law.

The lawsuit, filed in the U.S. District Court for the Western District of Wisconsin, alleges violations of the Indian Gaming Regulatory Act (IGRA), the Commodity Exchange Act (CEA), racketeering, false advertising, and corruption.

The tribe claims Kalshi’s sports-related event contracts qualify as Class II gaming, which, under IGRA, can only be operated by tribes on Indian lands. It also argues that the platform undermines tribal sovereignty by drawing business away from casinos.

“On information and belief, Kalshi has been prolific in offering sports event contracts with the knowledge that the legality of their sports event contracts is highly questionable and widely criticized as an impermissible form of sports gaming or gambling,” the complaint said.

The Nation is seeking a permanent injunction to immediately stop what it calls illegal, unregulated, and unabashed sports betting, as well as damages, lost profits, and disgorgement of ill-gotten gains.

Kalshi, which describes itself as a prediction market where users can “trade on the outcome of real-world events,” has partnered with Robinhood to embed a market hub into the brokerage’s platform. The complaint cites Kalshi’s marketing as a legal online sports betting platform, saying the company misrepresented its offerings and induced Robinhood into false advertising with them.

The filing also alleges Kalshi took advantage of a leadership vacuum at the Commodity Futures Trading Commission (CFTC) to expand self-certified sports event contracts. "The CFTC is understaffed and lacks the resources to adequately review and regulate Kalshi’s self-certified contracts to ensure compliance with the Commodity Exchange Act (CEA)," the tribe said.

This marks the fifth state where Kalshi faces lawsuits from either regulators or tribes, and the second in which it is a defendant rather than the plaintiff. Robinhood has separately sued Nevada and New Jersey regulators over cease-and-desist letters targeting its sports contracts business.