In brief
- Connecticut ordered Kalshi, Robinhood, and Crypto.com to halt unlicensed online gambling operations.
- A group of 16 tribes argued that prediction markets violate the Indian Gaming Regulatory Act by operating on tribal lands.
- The prediction market industry has grown to $6 billion in weekly volume, with Kalshi valued at $11 billion.
Connecticut Indian tribes said in an amicus brief that prediction market operator Kalshi has used its business to "siphon" money away from their casinos.
Kalshi sued the Connecticut Department of Consumer Protection in December 2025 in response to what it describes as the regulator "threatening Kalshi with imminent criminal and civil penalties for offering [event contracts]."
Just before the lawsuit was filed, Connecticut had ordered Kalshi, Robinhood, and Crypto.com to halt their "unlicensed" online gambling. A notice from the state regulator said cease-and-desist orders had been sent to each of the three prediction market operators, demanding they stop offering "sports event contracts" to Connecticut residents, and allow state users to withdraw their funds.
The Kalshi lawsuit did not name any of the state's tribes, but the Indian Gaming Association, along with 16 federally recognized American Indian tribes, wrote in an amicus brief that Kalshi has behaved as if "Congress gave it permission to enter Indian lands and siphon gaming revenues away from tribes over such tribes’ objections."
Amicus briefs are submissions from outside groups asking the court to consider their perspective, even though they are not formally named in a case.
The language in the brief is similar to that of California tribes, Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians, who sued Kalshi in July 2025.
Broadly speaking, the Connecticut amicus brief and California lawsuit contend that prediction market companies, like Kalshi and Polymarket, cannot legally offer sports-linked contracts on tribal lands without violating the Indian Gaming Regulatory Act.
Prediction markets have blown up as an industry in the past year, ballooning to $6 billion worth of notional volume in the past week, according to a Dune Analytics dashboard. In 2025, Kalshi saw its valuation jump to $11 billion after raising $1 billion in a yet undisclosed funding round.
And Polymarket, its main competitor, saw its valuation jump to $9 billion after a $2 billion investment from New York Stock Exchange parent company Intercontinental Exchange.