Prediction market operator challenges intervention amid rising legal pressures across U.S. states
Kalshi Files Opposition to Tribal Amicus Brief
Prediction market platform KalshiEX LLC has filed a formal request in the United States District Court of Maryland opposing a recent amicus brief submitted by a coalition of Native American tribal entities. Kalshi claims the brief is both “untimely and unhelpful,” and lacks the legal relevance necessary to assist the court in its deliberations. While Kalshi expressed openness to tribal involvement in broader legal contexts, it strongly objected to their participation at the trial level in this case.
Under federal court rules, amicus briefs are only accepted when the information they present is “timely and useful.” Kalshi’s filing asserts the tribal brief fails on both counts, especially as the company is already managing litigation on multiple legal fronts, including a separate Third Circuit appeal.
Tribal Sovereignty at Center of Dispute
The tribal organisations involved argue that platforms like Kalshi infringe on tribal sovereignty and undermine existing compacts with state governments that grant tribes exclusive or semi-exclusive rights to gaming operations. Their concern is that prediction markets—like Kalshi’s trading of contracts on outcomes of political or sporting events—blur the lines between regulated gambling and financial instruments, creating a regulatory gray area.
This aligns with a growing national concern about new forms of digital wagering bypassing existing frameworks. While some, including DraftKings executives, have proposed collaboration with tribes to harness prediction markets responsibly, many tribes remain wary of platforms operating outside traditional regulatory channels.
Kalshi Faces Regulatory Crackdowns Across the U.S.
The Maryland dispute is just one of several challenges Kalshi faces. The company is under cease-and-desist orders in New Jersey, Nevada, Ohio, and other jurisdictions that view its event contracts as illegal sports betting.
In April 2025, Kalshi filed a temporary restraining order and preliminary injunction against the Maryland Lottery and Gaming Control Commission (MLGCC), claiming the regulator’s cease-and-desist threatened to violate its constitutional rights. Kalshi maintains that its “event contracts” are distinct from traditional sports wagering and fall under commodity trading rules regulated by the Commodity Futures Trading Commission (CFTC)—not state-level gambling laws.
Broader Implications for the Future of Prediction Markets
Kalshi’s legal entanglements underscore a critical tension between innovation and regulation in the evolving U.S. gaming and financial tech landscape. While Kalshi argues for its classification as a regulated derivatives exchange, many regulators and tribal stakeholders see it as a backdoor to sports betting.
The outcome of these cases—particularly in Maryland—could set a precedent for how prediction markets are treated nationwide, determining whether they will be recognized as financial instruments or gambling products.
As the case develops, it will test the limits of state vs. federal oversight, tribal sovereignty, and the viability of novel financial products in the American regulatory ecosystem.
