A coalition of 145 Indian tribes and tribal organizations has asked the U.S. Supreme Court to review Flaherty v. KalshiEX, arguing that the platform’s sports-event contracts are sports bets and cannot evade tribal and state gaming rules.
The Oct. 8 amicus brief in Flaherty v. KalshiEX supports the petition for review of a Third Circuit decision that prevented New Jersey from enforcing its gambling laws against Kalshi’s sports-related contracts. The signatories comprise 130 federally recognized tribes and 15 tribal organizations advocating for Indian Country.
The tribes argue that calling the products event contracts or swaps does not change their substance as sports wagers. They say Kalshi offers sports betting on Indian lands without tribal authorization, in breach of the Indian Gaming Regulatory Act, and competes directly with tribal sports betting while diverting revenue needed for tribal governments.
Under the coalition’s reading of IGRA, sports betting is Class III gaming. It may occur on Indian lands only with tribal authorization and ordinances, state permission, and either a tribal-state compact or federally prescribed procedures. The brief says the 2010 addition of “swaps” to the Commodity Exchange Act did not silently displace decades of federal, state and tribal gaming law.
The Third Circuit held in April that Kalshi’s contracts were swaps traded on a Commodity Futures Trading Commission-licensed designated contract market, and that the Commodity Exchange Act was likely to preempt the relevant New Jersey law. New Jersey’s September petition asked the Supreme Court to decide whether the 2010 Dodd-Frank Act preempted state regulation of sports bets offered through CFTC-registered markets.
The tribal brief says the Third Circuit’s position conflicts with rulings by the Sixth and Ninth Circuits and threatens tribal self-government, self-sufficiency and sovereignty. “This state of affairs is unacceptable,” the brief states. “It is an affront to tribal sovereignty, an end-run around Congress and the States, and a violation of basic notions of fair play and sound regulation.”
Tribal governments collectively spend more than $450 million a year on gaming regulation and employ more than 6,000 gaming regulators, according to the brief. The Native American Rights Fund says more than 250 tribal governments operate gaming facilities on Indian lands in 29 states, with gaming proceeds supporting health care, education, housing, public safety, infrastructure and cultural preservation.
The coalition asked the court to grant review and “restore the balance among federal, state, and tribal gaming regulation” that it says Kalshi and similar platforms have upset.
