Tribal Nations Urge US Supreme Court to Review Kalshi Prediction Market Case
A coalition of Tribal Nations has filed an amicus brief asking the US Supreme Court to hear a case involving prediction market operator Kalshi, arguing its sports-event contracts amount to unregulated sports betting that threatens Tribal sovereignty and established gaming laws.
- A broad coalition of Tribal Nations has submitted an amicus brief in the case of Flaherty v. KalshiEX, calling for a Supreme Court review.
- The coalition argues that Kalshi’s sports-event contracts are a form of sports betting that bypasses state and Tribal gaming regulations.
- The brief highlights conflicting rulings from federal appellate courts as a key reason for the Supreme Court to intervene and clarify the law.
A wide-ranging coalition of Tribal Nations and associated organisations in the United States is petitioning the country's Supreme Court to take up a case concerning the prediction market company Kalshi. By filing an amicus brief in the Flaherty v. KalshiEX case, the group is seeking to halt what it describes as an attempt by Kalshi to conduct sports betting while avoiding the established regulatory framework for lawful gaming.
The central issue is whether the sports-event contracts offered by Kalshi constitute sports wagers. The Tribal coalition asserts that they are, regardless of the terminology used by the company, and should therefore be subject to state and Tribal gaming regulations. The group contends that Kalshi has offered these contracts on Indian lands without securing the necessary Tribal authorisation, undermining the authority of Tribal governments.
Conflicting Rulings Prompt Call for Clarity
The legal challenge has led to conflicting decisions in the US federal appellate courts, a situation the coalition argues warrants Supreme Court review. The dispute centres on a 2010 amendment to the Commodity Exchange Act which added the term “swaps”. While the Third Circuit court concluded this amendment had a significant effect on the gaming regulatory framework, the Ninth Circuit rejected the argument that it effectively displaced existing gaming laws.
The Tribal coalition is asking the Supreme Court to resolve this conflict and clarify how federal commodities law interacts with gaming laws. The brief argues that Congress did not intend for the 2010 amendment to dismantle the comprehensive regulatory system developed over decades by federal, state, and Tribal governments under laws like the 1988 Indian Gaming Regulatory Act (IGRA).
Threat to Tribal Services and Sovereignty
The brief highlights the significant economic and social stakes involved. More than 250 Tribal governments operate gaming facilities across 29 states, with the revenue generated funding essential governmental services for their communities, including healthcare, education, housing, and public safety infrastructure.
The coalition argues that prediction market firms offering sports-event contracts are competing directly with these Tribal operations while avoiding many of their regulatory obligations. This diversion of funds, the brief claims, has a direct negative impact on Tribal citizens and surrounding communities.
Every dollar illegally diverted to gaming on prediction markets is a dollar that no longer goes to jobs, housing, healthcare, education, public safety, and other critical government services for tribal citizens and their surrounding communities.
Beyond the financial impact, the coalition contends that allowing these operations without Tribal consent undermines the regulatory structure established by IGRA and Tribal-state gaming compacts. The group has asked the court to grant certiorari to review the case and restore what it calls the established balance among federal, state, and Tribal gaming regulation.
