The Ho-Chunk Nation is seeking to amend a complaint against Kalshi shortly after a judge decided not to hear the tribe’s arguments under the Lanham Act.
Ho-Chunk Accuses Kalshi of Deceptive Marketing
The Ho-Chunk Nation has been one of the staunchest opponents of prediction markets in Wisconsin. The nation has long opposed the growing sector, arguing that it challenges tribal sovereignty and that Kalshi’s uses deceptive marketing
Several months ago, the tribe initiated a lawsuit against prediction markets giant Kalshi, arguing that its products should be labelled as sports betting. For reference, prediction market operators have always firmly rejected the notion that their products constitute gambling or betting.
In addition to that, the tribe says that Kalshi engaged in deceptive marketing by suggesting that its products are legal on tribal land.
Since prediction markets offer event contracts, which are regulated by the CFTC and not considered betting, Kalshi can effectively offer its products on the tribe’s land, circumventing rules preventing traditional sportsbooks from doing the same. However, the Indian Gaming Regulatory Act (IGRA) allows tribes to retain sovereignty to approve gaming allowed on their land.
Ho-Chunk therefore slammed Kalshi’s claim that its products are legal in all 50 states. At the same time, Kalshi, as a CFTC-regulated body, insists that this is indeed the case.
The Tribe Filed a Brief to Update Its Complaint
Kalshi initially sought to dismiss the deceptive advertising lawsuit. In May, a federal judge ruled that the lawsuit may continue but rejected the tribe’s Lanham Act and Racketeer Influenced and Corrupt Organizations Act claims. US District Judge William M. Conley of the Western District of Wisconsin argued that there was no precedent to label Kalshi’s marketing as false.
As a result, Ho-Chunk has now updated its complaint, appealing to the IGRA. The tribal nation insisted that the IGRA unambiguously says that tribes can decide what class III gaming to allow on their land.
Ho-Chunk lawyers also addressed a Kalshi statement, in which the latter company noted that its “50 States Legal” claim applies to states and not tribal nations. While the tribe agreed that tribes are not states, it argued that federally recognized tribes exist within some 35 states. As a result, lawyers representing the tribe emphasized that Kalshi cannot suggest that Indian lands are not part of the states.
In other news, Wisconsin tried to regulate prediction markets, only to face strong pushback from the CFTC.