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Kalshi’s claim to be a commodities trader is being rejected by courts

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Kalshi’s claim to be a commodities trader is being rejected by courts

State courts have struck another blow against online prediction market Kalshi, which has sought to remain outside of gaming law, claiming it's a trading — not gambling — platform.

On Wednesday, a US District judge granted a preliminary injunction to California tribes, prohibiting Kalshi from offering sports contracts (AKA trades or "swaps") on tribal land. The ruling was handed down to the Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, which jointly sued Kalshi for allegedly violating the Indian Gaming Regulatory Act.

In that case, a panel of judges ruled that Kalshi's sports prediction trading constituted Class III gaming, which covers sports betting and parimutuel (pool) wagering. The court determined that regulations issued by the Commodity Futures Trading Commission (CFTC), which currently governs Kalshi, didn't preempt the Indian Gaming Regulatory Act.

That same day, Arkansas Attorney General Tim Griffin announced the state was suing the platform under the Deceptive Trade Practices Act for alleged illegal gambling operations.

"Kalshi is not blind that its platform presents real, tangible risks to its users, including excessive wagering, financial losses, depression, and other mental health harms," wrote Griffin in a press release. "It doesn’t take a genius to understand that wagering money on whether the Razorbacks win or lose is gambling. And gambling on an unregulated platform is squarely prohibited by Arkansas law."

Late last month, the state of Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, accusing the company of violating state gambling prohibitions.


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