The prediction market platform Kalshi has announced partnerships with three California tribes.
The announcement comes after the 9th U.S. Circuit Court of Appeals ruled last month that tribes were likely to succeed in their claims that Kalshi violated the Indian Gaming Regulatory Act by offering sports betting on their lands.
The partnerships will allow tribes to develop apps with access to Kalshi’s markets, covering topics from presidential elections to movie ratings. Kalshi, a federally regulated exchange, and the tribes will share revenue.
“Many of these folks are interested in economic development and economic opportunities,” said Max Crowley, vice president of business development at Kalshi. “Prediction markets are becoming a mainstream asset class.”
Crowley described the platform as a derivatives market, rather than a gambling website.
“We don't act as a house," he said. "We create the markets."
One of the tribes entering a partnership is the Alturas Indian Rancheria in Modoc County. The tribe, which has only a handful of members, has invested in cigarette manufacturing, cannabis growing and casino gaming in the past — with varying levels of legal success.
California prosecutors accused the tribe of cigarette trafficking. And the Bureau of Indian Affairs said the rancheria's tribally run gas station and smoke shop have operated illegally for years. Tribal leadership have been embroiled in a power dispute for more than a decade.
Alturas Indian Rancheria’s attorney was not immediately available for comment.
Crowley said Kalshi is working with five tribes so far, with more partnerships planned. But some tribal members have raised alarms that prediction markets could compete with traditional gaming.
Indian Gaming Association Chairman David Bean called prediction markets an “existential threat to tribal sovereignty,” Native News Online reported.
Blue Lake Rancheria in Humboldt County has sued Kalshi, accusing the company of violating federal gaming laws by offering sports betting.
California bans sports betting, even for tribes.
Kalshi has argued it offers financial contracts, not gambling. A district court denied the tribes’ request for a preliminary injunction, accepting Kalshi’s arguments. But the appeals court reversed that decision last month.
