Four New Mexico tribes are taking prediction market company Kalshi to federal court, arguing that its sports contracts amount to illegal online sports betting conducted on tribal lands without approval from tribal regulators.
The Mescalero Apache Tribe, Pueblo of Isleta, Pueblo of Pojoaque, and Pueblo of Sandia filed the lawsuit Tuesday (May 12) in federal court in New Mexico. The 33-page complaint, reviewed by ReadWrite, seeks court orders blocking Kalshi from offering sports event contracts on tribal lands, while three of the tribes are also pursuing civil penalties.
Tribal regulators say Kalshi’s mobile app lets users place wagers on sporting events through yes-or-no contracts that operate like standard sportsbook bets. The tribes argue the products qualify as Class III gaming under the Indian Gaming Regulatory Act, known as IGRA, and therefore require tribal authorization and compliance with existing tribal-state gaming compacts.
The document cites a 2016 Interior Department letter stating that “non-tribal Internet gaming” would conflict with the exclusivity promised to tribes under those compacts.
The complaint says Kalshi never obtained tribal licenses and allows wagering by users as young as 18, even though tribal gaming agreements in New Mexico prohibit Class III gaming for anyone under 21.
New Mexico tribes join growing legal fight against Kalshi
The filing describes Kalshi’s offerings as nearly indistinguishable from traditional sportsbooks, pointing to bets involving game winners, point spreads, totals, parlays, and proposition wagers. One example cited in the complaint involved contracts tied to a University of New Mexico Lobos versus New Mexico State Aggies game.
“Bookmakers have been providing the same service as Kalshi since at least the late 1700s,” the complaint states.
The tribes also pointed to Kalshi’s earlier court arguments against the Commodity Futures Trading Commission, when the company reportedly argued that sports-related contracts resembled prohibited gaming activity. According to the filing, Kalshi shifted course after the 2024 election and began including sports contracts tied to the NFL, NBA, NHL, and NCAA beginning in January 2025.
The lawsuit references recent court rulings in Nevada and elsewhere that treated Kalshi’s products as sports gambling. The complaint quotes a federal judge who wrote, “As Justice Potter Stewart famously said about pornography in his concurrence in Jacobellis v. State of Ohio, ‘I know it when I see it.’ These are sports wagers and everyone who sees them knows it,” the Nevada court wrote, according to the filing.
The New Mexico case arrives as tribal governments continue challenging prediction market platforms. The Ho-Chunk Nation previously sued Kalshi in Wisconsin, and California tribes recently lost an appeals court effort seeking intervention in related litigation. Tribal leaders have increasingly argued that prediction markets threaten tribal gaming exclusivity agreements and undermine sovereignty protections negotiated with states.
The complaint also says Kalshi promoted itself through advertising and trademark filings describing its services as “bookmaking services” and “sports betting and gambling tournaments.” According to the tribes, geofencing technology already used throughout the gaming industry could easily block wagering activity on tribal lands.
The tribes claim Kalshi’s daily transaction volume rose from just over $4 million in December 2024 to roughly $800 million daily after sports betting contracts were introduced. It also cites reports valuing the company at about $22 billion following a recent funding round.
The tribes argue Kalshi’s continued operations bypass tribal safeguards involving fraud prevention, integrity monitoring, money laundering controls, and problem gambling protections.
Featured image: Kalshi / Canva
The post New Mexico tribes challenge Kalshi sports contracts over alleged illegal gambling appeared first on ReadWrite.
This articles is written by : Fady Askharoun Samy Askharoun
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