Tribes Back Maryland’s Regulator in Its Legal Battle with Kalshi

A growing number of tribes is taking a stance in the legal battle surrounding Kalshi’s sports event contract offerings, this time in Maryland’s federal court. Several national and regional tribal organizations, representing twenty-seven federally recognized tribes, have filed an amicus brief opposing Kalshi’s court plea for a preliminary injunction against the Maryland Lottery and Gaming Control Commission (MLGCC).

The Regulator Argues Event Contracts Constitute Sports Wagering

The tribes fully support the MLGCC’s cease-and-desist order from April, which would ban Kalshi’s operations in Maryland. The authority argues that the company’s prediction contracts on the outcome of sports events are indistinguishable from traditional sports betting. Since Kalshi lacks a license to offer sports wagering in Maryland, such an interpretation would make its products illegal in the state.

Kalshi, a CFTC-regulated exchange, interprets the situation differently. The company argues its event contracts are not bets but derivatives. As federally regulated peer-to-peer swaps, these do not require state-level oversight. Kalshi has thus asked the court to grant it emergency relief, blocking the MLGCC order until the lawsuit is resolved.

This latest development follows growing pushback against Kalshi in federal courts. A similar case in the Third Circuit Court of Appeals saw a broad coalition consisting of 34 state attorneys general, the American Gaming Association, and various tribal governments side with the state of New Jersey by filing amicus briefs opposing Kalshi.

Tribes Fear That Event Contracts Could Undermine Tribal Gaming Rights

Tribes remain convinced that Kalshi’s offerings are indistinguishable from sports wagering. Their newest brief quoted language from the CFTC explicitly prohibiting gaming-related event contracts. They contend that Kalshi has embraced a new form of unlicensed sports betting, leveraging legal loopholes and weak regulatory oversight to expand its business.

According to tribal leaders, Kalshi’s continued operations in Maryland, and potentially elsewhere, could undermine state regulations and tribal sovereignty. Tribal casinos rely on strict compacts with state governments to ensure exclusive control over certain types of gambling within their jurisdictions, guaranteeing a steady revenue stream for communities. They fear Kalshi’s business model bypasses these restrictions, eroding tribal gaming rights.

Stakes remain high in Maryland. If the federal court favors Kalshi’s interpretation of regulations, it could set a precedent for other states attempting to rein in prediction markets. A ruling on Kalshi’s preliminary relief request should come later this summer, marking the next chapter in the ongoing legal battle. With broad opposition uniting against the company, the company can expect a tough fight.