Robinhood Challenges Tribal Bid to Halt Kalshi Sports Contracts

​Robinhood has filed a formal opposition to a request by three Native American tribes for a preliminary injunction against sports-related event contracts traded on Kalshi's exchange.

The Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians sued Robinhood and Kalshi in August. They allege the companies are facilitating what amounts to illegal sports gambling, particularly on tribal lands. The lawsuit argues that contracts tied to outcomes in football, basketball, pickleball, esports, and even chess fall outside the scope of federally sanctioned markets.

In September, the tribes sought a court order to block Kalshi from offering such contracts altogether. Robinhood, which acts as a broker for customers trading on Kalshi's platform, responded last week by warning that an injunction would cause "substantial and irreparable harm" to its business.

The company emphasized that under the Commodity Exchange Act, oversight of event contracts belongs exclusively to the Commodity Futures Trading Commission (CFTC). Kalshi operates as a CFTC-registered Designated Contract Market, while Robinhood functions as a registered Futures Commission Merchant, meaning the two firms are subject to distinct federal regulations.

Robinhood argued that disrupting Kalshi's ability to list contracts would in turn prevent it from processing client orders, damaging both firms' operations. It also said the injunction would interfere with Congress's intent to establish a centralized regulatory structure for derivatives markets.

The case, pending in the U.S. District Court for the Northern District of California, could set precedent for how event-based contracts are treated when they overlap with activities traditionally defined as gambling. For the tribes, the outcome will determine the extent of their authority to limit such markets on their lands. For Robinhood and Kalshi, it is a test of how much protection federal registration provides in disputes with local and tribal governments.