Posted on: June 26, 2026, 12:24h.
Last updated on: June 25, 2026, 02:28h.
- Four New Mexico tribes are suing online prediction market Kalshi, claiming its sports contracts violate federal and tribal gaming laws by operating on sovereign lands
- If courts don’t block sports prediction markets, a state lawmaker proposes renegotiating tribal compacts to allow online sports betting
- Kalshi is seeking a dismissal, arguing that US Supreme Court precedent prevents tribes from regulating non-member businesses
New Mexico tribes that operate Native casinos are demanding that federal courts block sports prediction markets. If that doesn’t happen, they say state lawmakers must renegotiate their Class III gaming compact to give the tribes the exclusive rights to online sports betting.
Last month, the Mescalero Apache Tribe, Pueblo of Isleta, Pueblo of Pojoaque, and Pueblo of Sandia filed a 34-page joint complaint in New Mexico’s federal court alleging that Kalshi and other prediction markets offering sports event contracts are violating federal, state, and tribal gaming laws.
The tribes contend that they possess the sole rights to operate all forms of gaming on their sovereign lands, and Kalshi’s continued allowance of its online operation to be accessed on tribal properties infringes on their federal and state-approved Class III gaming compact under the Indian Gaming Regulatory Act (IGRA).
While the case continues, some tribes say state lawmakers in Santa Fe should take a fresh look at their compact. New Mexico Rep. John Block (R-Alamogordo) agrees.
Compact Reopening
This week, Block, who sits on the joint Indian Affairs Committee, proposed reopening the Class III gaming compact that serves New Mexico’s 17 gaming tribes to consider adding online sports betting. The governing document of tribal gaming in the state currently only permits in-person sports betting on tribal lands.
If people are already here operating online in the state illegally, then that robs the tribes, it robs us, it robs every single New Mexican of that tax revenue,” Block said.
Currently, Kalshi and numerous other prediction markets that are federally regulated by the Commodity Futures Trading Commission (CFTC) offer trading on sports events throughout New Mexico.
For the Class III compact to be reopened and renegotiated, the tribes and Gov. Michelle Lujan Grisham (D) must first agree to review the gaming terms. Once a new compact is settled, the state legislature would need to approve any proposed changes.
The New Mexico Legislature has adjourned for 2026, though Lujan Grisham could call an emergency session.
Kalshi Seeks Dismissal
On Wednesday, Kalshi filed its response in seeking to dismiss the tribal lawsuit
Kalshi’s topline argument is that “the inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe.” The quote is from Montana v. United States, a landmark 1981 US Supreme Court ruling that significantly limited the regulatory powers of Indian tribes over non-members within reservation boundaries.
“Four tribal plaintiffs have brought suit, asking the Court to subject Kalshi — a nonmember and a nationwide, federally regulated exchange — to their jurisdiction under various tribal laws. Such a result would contravene the law,” Kalshi’s response read.
“If the Court were to permit Plaintiffs to exercise regulatory authority over Kalshi, hundreds of other tribes could, too. Such piecemeal regulation would be intolerable for an exchange that operates throughout the United States under the oversight of a federal regulator. And it would undermine the uniform scheme governing the nation’s derivative markets that Congress established decades ago,” Kalshi argued.