For the First Time, a Federal Judge Found a Tribe Likely to Win Its IGRA Case Against Kalshi

Every court that had faced the question until Monday ruled the same way: tribes were not likely to succeed in using Indian gaming law to stop Kalshi from operating on tribal lands. A federal court in California declined to issue an injunction in November 2025. State courts in Nevada and New Jersey sided with Kalshi. The Third Circuit, in April 2026, ruled that federal law preempted state gaming statutes entirely.

Then came U.S. District Judge William M. Conley in Madison, Wisconsin.

In an opinion and order issued May 11, 2026, Judge Conley allowed the Ho-Chunk Nation's Indian Gaming Regulatory Act claim to proceed — and made a finding that no federal court had made before in this wave of litigation: that the tribe has "a likelihood of success" on the merits. Kalshi can still operate during the case. The injunction was denied. But the underlying legal question the tribe raised is now alive in a federal court in a way it has never been before, and a judicial split has opened that may ultimately require appellate resolution.

What the Ruling Actually Said

The Ho-Chunk Nation, one of eleven federally recognized tribes with exclusive gaming rights under a compact with the State of Wisconsin, filed suit in August 2025 in the U.S. District Court for the Western District of Wisconsin. The complaint named four defendants: Kalshi Inc., KalshiEX LLC, Robinhood Markets Inc., and Robinhood Derivatives LLC. The tribe alleged that by allowing users on tribal land to access sports event contracts through Robinhood's app and Kalshi's platform, the defendants were violating the Indian Gaming Regulatory Act (IGRA), engaging in false advertising under the Lanham Act, and operating a racketeering enterprise under RICO.

On May 11, Judge Conley ruled on three pending motions. The outcome was split:

IGRA claim — survived: The motions to dismiss filed by Kalshi (Docket 28) and Robinhood (Docket 31) were denied as to the IGRA claim. The case proceeds on that theory. Critically, Judge Conley found the Ho-Chunk Nation has shown "a likelihood of success" on the IGRA claim — language courts use in the injunction analysis but that signals how the judge views the underlying merits.

Lanham Act claim — dismissed: The court found Kalshi's advertising — including marketing that described itself as a legal nationwide sports platform — did not rise to actionable false advertising under the Lanham Act.

RICO claim — dismissed: The court declined to find that the alleged coordination between Kalshi and Robinhood met the statutory requirements for a racketeering enterprise claim.

Preliminary injunction — denied: Despite finding a likelihood of success on IGRA, Judge Conley denied the tribe's motion for a preliminary injunction (Docket 37). The reason: the tribe had not demonstrated "irreparable harm," the second required prong of the injunction test. Without that showing, courts cannot freeze operations mid-litigation even when the party seeking relief is likely to prevail on the underlying claim.

The net result: Kalshi and Robinhood continue operating in Wisconsin. But the IGRA case moves forward toward a trial currently scheduled for May 24, 2027.

Why This Is Different From Every Other Ruling

The contrast with California is direct. In November 2025, U.S. District Judge Jacqueline Scott Corley in the Northern District of California denied a preliminary injunction sought by three California tribes — Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians. Judge Corley expressed concern about Kalshi's approach, writing that "by self-certifying the legality of its event contracts in a way that insulates its activities from judicial review, Kalshi may have found a way around prohibitions on interstate gambling that were created with the Tribes' best interest in mind." But she found the California tribes were not likely to succeed on the IGRA merits.

Judge Conley reached the opposite conclusion.

The difference may come down to compact language. IGRA requires gaming on Indian lands to comply with tribal-state compacts. Kalshi successfully argued in California that the relevant compacts did not specifically prohibit what Kalshi was doing — a compact can only be enforced when specific provisions are violated. In Wisconsin, Judge Conley found the Ho-Chunk Nation's compact with the state provided sufficient grounds to survive that argument, at least at the motion-to-dismiss stage.

This creates a district court split: two federal judges, similar legal theories, opposite conclusions on the merits. Neither ruling is binding on the other. But the split significantly raises the stakes for appellate review — the California tribes have already appealed Judge Corley's ruling to the Ninth Circuit — and creates a plausible pathway to Supreme Court consideration of a question that affects prediction market access for every tribe in the country with a gaming compact.

The Three Federal Laws Nobody Can Agree On

Every tribal gaming case against prediction markets turns on the same collision of three federal statutes. Understanding the conflict is essential to understanding why courts keep reaching different results.

The Commodity Exchange Act (CEA) governs U.S. derivatives markets. Kalshi operates as a CFTC-regulated Designated Contract Market and Derivatives Clearing Organization, a status granted by the CFTC in November 2020. Kalshi's position is that CEA regulation is exclusive: event contracts on a federally licensed derivatives exchange are regulated by the CFTC and by no one else. States, and by extension tribes, cannot override federal commodities law.

The Indian Gaming Regulatory Act (IGRA), enacted in 1988 (25 U.S.C. § 2701 et seq.), establishes the framework for gaming on Indian lands. It gives federally recognized tribes exclusive authority over Class III gaming — which includes sports wagering — on tribal lands, subject to compacts negotiated with individual states. Tribes argue IGRA is an independent federal law that Kalshi cannot nullify by pointing to CFTC oversight. IGRA and the CEA are both federal statutes; the question is which applies when they conflict.

The Unlawful Internet Gambling Enforcement Act (UIGEA), enacted in 2006, added a third layer. UIGEA contains explicit carve-outs for transactions on CFTC-regulated exchanges, excluding them from the definition of "unlawful internet gambling." Kalshi argues this means its contracts are not prohibited internet gambling even when accessed by users on tribal land. Tribes argue UIGEA was not designed to nullify IGRA's gaming exclusivity provisions, and that a CFTC carve-out in an internet gambling statute does not override tribal gaming sovereignty.

Judge Conley's ruling kept the IGRA argument alive against the CEA/UIGEA preemption defense. The Ninth Circuit may reach a different conclusion in the California appeal. The possibility of circuit-level disagreement is exactly the kind of legal uncertainty that can draw Supreme Court review.

A Coalition Watching From the Sidelines

The Ho-Chunk case attracted substantial amicus support before the May 11 ruling. Eight major tribal gaming organizations and sixteen individually named federally recognized tribes filed briefs supporting the Ho-Chunk Nation's position, according to CourtListener docket filings. The organizations include the Indian Gaming Association, the National Congress of American Indians, the Washington Indian Gaming Association, the California Nations Indian Gaming Association, the Arizona Indian Gaming Association, the Oklahoma Indian Gaming Association, and the Native American Finance Officers Association.

That coalition is not incidental. Tribal gaming interests collectively represent a multi-billion dollar industry — and a governance framework that tribes have spent decades building through compact negotiations. A final ruling that Kalshi can freely operate on tribal land without tribal authorization or compact compliance would affect every tribe in the country whose compact gives it exclusivity over sports wagering. The organizations filing amicus briefs are not intervening in a single Wisconsin case; they are defending the legal architecture that underlies tribal gaming nationwide.

Kalshi Can Keep Operating

The preliminary injunction denial means nothing changes operationally in the near term. Kalshi and Robinhood continue offering sports event contracts, including to users on tribal land in Wisconsin, while the case proceeds to trial.

This is consistent with how every other prediction market case has resolved at the injunction stage. Even when courts have found that tribal or state plaintiffs have valid legal theories, the irreparable harm requirement has consistently blocked injunctive relief. Courts have reasoned that financial harm to tribal gaming revenues, while real, can be compensated by money damages after a final judgment — and that shutting down a federally regulated exchange during litigation would itself cause significant harm.

The trial is set for May 24, 2027. Between now and then, the parties will complete discovery, brief and argue dispositive motions, exchange settlement letters per the court's pretrial order, and attend at least two pretrial conferences before Judge Conley.

What This Means for Prediction Market Traders

For traders using Kalshi on Robinhood or directly on the Kalshi platform, nothing changes today. Kalshi remains a CFTC-regulated, federally licensed event contract market. The exchange is operational nationwide. Its $22 billion valuation, reflecting the $1 billion fundraising round it closed in March 2026, prices in continued regulatory confidence — even with more than twenty federal and state legal challenges pending.

What the Wisconsin ruling does signal: the IGRA theory is not dead. Judge Conley's finding of "likelihood of success" will almost certainly be cited in future tribal gaming challenges and in the Ninth Circuit appeal from the California ruling. Other tribes in Wisconsin — there are eleven federally recognized tribes with compacts in the state — may point to this ruling in their own legal analysis. Tribes in other states watching the Ninth Circuit appeal will now have an additional data point: at least one federal judge has found that the IGRA argument can succeed.

The judicial map of prediction market litigation now has a new point on it, and it points in a different direction than everything that came before it.

Frequently Asked Questions

What is IGRA? The Indian Gaming Regulatory Act (25 U.S.C. § 2701 et seq.) is a 1988 federal law that governs gaming on Indian lands. It gives federally recognized tribes exclusive authority over Class III gaming — including sports wagering — on tribal lands, subject to compacts negotiated between individual tribes and states.

Why was the injunction denied if the tribe is likely to win? Courts require four showings to grant a preliminary injunction: likelihood of success, irreparable harm, balance of equities in favor of the moving party, and the public interest. Judge Conley found the Ho-Chunk Nation showed a likelihood of success on IGRA, but found the tribe had not demonstrated irreparable harm — damages that could not be compensated by money after a final judgment.

What is Robinhood's role in the case? Robinhood Derivatives LLC is a registered Futures Commission Merchant that routes customer orders to the Kalshi exchange. Robinhood Markets Inc. is the parent company. Both entities are named defendants because the Ho-Chunk Nation alleged that by distributing Kalshi's sports contracts through the Robinhood app, Robinhood was a co-participant in the alleged IGRA violation.

How does this ruling differ from the California decision? In November 2025, the Northern District of California ruled that California tribes were not likely to succeed on their IGRA claim against Kalshi. Judge Conley in Wisconsin reached the opposite conclusion on the same legal theory, creating a district court split that may ultimately require circuit court or Supreme Court resolution.

What happens next? Trial in the Western District of Wisconsin is scheduled for May 24, 2027. Both sides may seek summary judgment before then. The California tribes' appeal is separately pending in the Ninth Circuit, and any ruling there will be closely watched in Wisconsin and other tribal gaming jurisdictions.

Conclusion

The Ho-Chunk Nation did not win an injunction on May 11. Kalshi keeps operating. But in a litigation landscape where every prior ruling had gone the same way, Judge Conley's finding that the tribe has a likelihood of success on its IGRA claim is the first crack in a wall that Kalshi had, until now, defended without exception. A district court split is now open. The legal question that tribal nations across the country have been pressing — whether a CFTC-regulated exchange can operate freely on Indian land without tribal authorization — is alive in federal court, pointed toward a trial in 2027 and a potential appellate showdown that neither side can fully control.

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Sources & Verification

• Ho-Chunk Nation likelihood of success on IGRA claim, ruling May 11, 2026: Bloomberg, "Kalshi Judge Predicts Tribe Will Win Block on Sports Contracts" — May 12, 2026
• Case docket, motions to dismiss, pretrial order, trial date: CourtListener — Ho-Chunk Nation v. Kalshi Inc., No. 3:25-cv-00698
• Original complaint text — IGRA, Lanham Act, and RICO allegations: Ho-Chunk Nation complaint PDF via Courthouse News
• IGRA statutory background — 25 U.S.C. § 2701 et seq.: Congress.gov CRS Report IF12527
• Kalshi CFTC DCM and DCO status: CFTC Trading Organization Registry
• Kalshi $22B valuation (March 2026 fundraising round): Reuters, March 19, 2026