Posted on: June 26, 2026, 12:24h.
Last updated on: June 25, 2026, 02:28h.
- Four Native American tribes from New Mexico are taking legal action against the online prediction platform Kalshi, alleging that its sports contracts breach both federal and tribal gaming regulations by operating on their sovereign territories.
- If the courts do not intervene to halt sports prediction markets, a state legislator is advocating for the renegotiation of tribal compacts to permit online sports wagering.
- Kalshi is pushing for the lawsuit’s dismissal, contending that precedent from the U.S. Supreme Court prohibits tribes from extending their regulatory powers to non-member businesses.
The tribes operating Native casinos in New Mexico are urging federal courts to prevent the continuation of sports prediction markets. They argue that, should court intervention fail, state lawmakers need to reevaluate their Class III gaming compacts to grant tribes exclusive rights to online sports betting.
Last month, the Mescalero Apache Tribe, Pueblo of Isleta, Pueblo of Pojoaque, and Pueblo of Sandia jointly filed a 34-page complaint in federal court in New Mexico, claiming Kalshi and other prediction markets that offer contracts on sports events are breaching both federal, state, and tribal gaming regulations.
The tribes assert their exclusive rights to manage all gaming activities on their sovereign territories and argue that Kalshi’s ongoing access to their tribal lands is a violation of their federally and state-approved Class III gaming compact as outlined in the Indian Gaming Regulatory Act (IGRA).
While the legal proceedings are underway, some tribes believe that lawmakers in Santa Fe should reassess their compact. New Mexico Representative John Block (R-Alamogordo) is in support of this idea.
Revisiting the Compact
This week, Block, a member of the joint Indian Affairs Committee, suggested reopening the Class III gaming compact that governs the 17 gaming tribes in New Mexico to explore the inclusion of online sports betting. The current regulation only permits in-person sports betting within tribal properties.
“If individuals are already engaging in online betting in the state illegally, it deprives tribes, it deprives us, and it deprives every New Mexican of that tax revenue,” Block commented.
At present, Kalshi and a variety of other prediction markets, regulated federally by the Commodity Futures Trading Commission (CFTC), facilitate trading on sports events across New Mexico.
For the Class III compact to be reopened and renegotiated, both the tribes and Governor Michelle Lujan Grisham (D) must first reach an agreement to review the gaming terms. Once a new compact is established, the state legislature will need to endorse any proposed modifications.
Although the New Mexico Legislature has adjourned for 2026, Governor Lujan Grisham can still call for an emergency session.
Kalshi’s Motion for Dismissal
On Wednesday, Kalshi filed its response seeking to dismiss the tribal lawsuit.
Kalshi argues that “the inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers.” This statement refers to Montana v. United States, a significant 1981 U.S. Supreme Court ruling that curtailed the regulatory reach of Indian tribes over non-members within reservation boundaries.
“The four tribal plaintiffs seek to impose jurisdiction over Kalshi—a non-member and nationwide, federally regulated exchange—under various tribal laws. Such an outcome would contravene established law,” Kalshi’s response stated.
“Allowing the Plaintiffs to exert regulatory control over Kalshi would enable hundreds of other tribes to do the same. This fragmented regulatory approach would be unmanageable for an exchange operating throughout the United States under federal oversight, undermining the uniform regulatory framework governing the nation’s derivative markets established by Congress years ago,” Kalshi contended.