by
Another day, another prediction market lawsuit. What else is new at this point, right?
Joining the party this time are three pueblos and the Mescalero Apache Tribe, all in New Mexico. They’re going after Kalshi in a federal court for the same reasons everyone else is: the belief that Kalshi is illegally offering sports betting.
New Mexico betting laws say that only local Native American tribes can offer betting, and it has to be done on tribal land. That means, in the tribes eyes, that Kalshi and other prediction markets are sidestepping the state’s laws, which have been in place for decades now.
So does this lawsuit have any merit? Or will it be overpowered by the big pockets of Kalshi? Let’s dig into it in this article!
Details About New New Mexico Lawsuit
The lawsuit was filed in federal court in Albuquerque by the Mescalero Apache Tribe, Sandia Pueblo, Isleta Pueblo, and Pojoaque Pueblo. As the saying goes, there’s strength in numbers, so you can see why they joined forces on this.
Kalshi, of course, is using the same argument it uses everywhere else: the sports markets on its app are not bets, they’re event contracts. That distinction puts the company under the Commodity Futures Trading Commission. This would free them from any tribal or state sports betting laws.
The tribes (and every other state suing Kalshi) say that’s bullcrap. Call it events contracts or not, but the end result is still the same: a person opens a sports betting-like app, puts money on a sports outcome, and gets paid if they’re right. Whether Kalshi calls that a “trade” or a “bet” doesn’t really matter to the people who regulate gambling on tribal lands.
The tribes also say Kalshi allows users 18 and older to place these sports-related trades. That matters because tribal gaming laws and the Indian Gaming Regulatory Act generally require gamblers on Indian lands to be 21 or older. The IGRA is a federal law, not something just specific to the state. So that’s why they went straight to federal courts.
Duane Duffy, a vice president with the Mescalero Apache Tribe, put it bluntly. He said tribes “cannot sit by idly as the laws that enshrine this right are ignored”, and that, “tribes fought hard to protect their inherent sovereign right to operate and regulate casinos on tribal lands.”
Evoking those tribal rights just means more than, say, Nevada suing because Kalshi is eating away at their betting market. That argument falls on deaf ears when it’s all about money. New Mexico tribes can at least hang their hat in saying their rights are being violated again — a touchy subject given America’s history.
More Than A Dozen States Are Fighting Kalshi Too
New Mexico isn’t alone here. Not even close. Kalshi has been getting dragged into courtrooms all over the country for a year straight. States that have taken action include New Jersey, Nevada, Massachusetts, Maryland, Ohio, New York, Arizona, Wisconsin, and more (the list keeps growing by the day, at this point).
For what it’s worth, Kalshi has the slight upper hand so far. They won against New Jersey with a 2-1 vote in a federal appeals court, which ruled that state’s gambling law couldn’t block its events contracts. That doesn’t automatically end the debate, but it was a huge vote of confidence for Kalshi.
Helping matters out is that the federal government is beginning to sue back some of these states. We saw it in Connecticut, Illinois, and Wisconsin. In all these cases, the Feds said it is, in fact, a federal government issue, and states didn’t have the right to prohibit prediction markets.
That’s why the New Mexico tribal lawsuit matters. It adds a fresh angle to the story. This isn’t just state gambling law anymore — it’s tribal sovereignty at the federal level too. And that might be a much tougher issue for Kalshi to overcome.
Kalshi Has The Pockets To Keep Fighting
Obviously, fighting all these lawsuits ain’t cheap. However, Kalshi has the funds to do it.
Get this, the company just announced a $1 billion Series F funding round. Want to know what their valuation stands at now? A whopping $22 billion valuation. That valuation is double what Kalshi was worth just five months ago. For comparison, DraftKings — which is the second biggest operator in most legal betting states — is valued at $12 billion on the public markets.
Look, we think Kalshi’s private valuation is inflated, but we somewhat get why it’s exploding. Simply put, the business is exploding just as much. Kalshi says its annualized revenue is now over $1.5 billion, while annualized trading volume has jumped from $52 billion to $178 billion in just six months. This company, and industry as a whole, is growing at light speed and there should be a premium on that.
To be frank, the New Mexico tribes don’t have the pockets to keep pace with Kalshi. But… federal Indian gaming laws might be the trick up their sleeve. We’ll be following this story closely cause it has huge ramifications countrywide.
Online betting sites 