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Ho-Chunk Nation sues Kalshi over alleged illegal sports betting scheme

A tribe’s legal battle could redefine where sports betting ends and financial trading begins. Vulnerable users say Kalshi’s platform exploits regulatory loopholes.

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Ho-Chunk Nation sues Kalshi over alleged illegal sports betting scheme

The Ho-Chunk Nation of Wisconsin has taken legal action against the trading platform Kalshi and Robinhood, filing a lawsuit in August 2025. The tribe accuses Kalshi of operating as an illegal sports betting provider, despite its claims of being a federally regulated financial service. Five individual users have also joined a class-action case, arguing that the platform misleads customers about its true nature.

The lawsuit centres on allegations that Kalshi’s marketing deliberately blurs the line between financial trading and sports. One plaintiff, Jeremy Kravetz, claims the platform allows him to place bets even though he is barred from sportsbooks in his home state due to problem gambling concerns. Critics argue this exposes vulnerable users to further risk.

An advert by Kalshi once suggested that trading on its platform could help users escape debt, a claim widely criticised as irresponsible. The plaintiffs allege that such messaging creates a false impression—presenting sports betting as a skill-based financial tool rather than gambling. Kalshi has repeatedly defended itself by stating it holds a federal licence under the Commodity Futures Trading Commission (CFTC). The company argues this places it outside state-level gambling regulations. However, regulators in Nevada and other states are pushing to shut it down, claiming it violates local gaming laws. The Ho-Chunk Nation’s involvement adds weight to the case, as the tribe operates its own legal sports betting services. Their lawsuit argues that Kalshi’s operations undercut regulated sports betting markets while avoiding the same oversight.

The legal challenges now facing Kalshi could determine whether its business model is deemed gambling or a legitimate financial service. If courts rule against the platform, it may face shutdowns in multiple states and potential federal scrutiny. The outcome will also impact how similar trading platforms market themselves in the future.

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