Ho-Chunk Nation appeal reaches Seventh Circuit as IGRA conflict deepens

When the Western District of Wisconsin declined to dismiss the Ho-Chunk Nation's claims against Kalshi, the company had a choice: absorb the ruling and litigate upward from a trial court, or seek immediate appellate review. Kalshi petitioned the Seventh Circuit directly. The Seventh Circuit said yes.

That decision to grant the petition matters more than the underlying ruling it reviewed. Federal appellate courts are not required to take interlocutory appeals. When they do, it is because the legal question is unsettled enough to warrant early resolution. The Seventh Circuit appears to have found one here.

The question is whether the Indian Gaming Regulatory Act reaches sports-event contracts offered by a CFTC-regulated designated contract market to customers located on tribal land. Kalshi's argument turns on a carveout in the Unlawful Internet Gambling Enforcement Act for CFTC-regulated exchanges — if that carveout holds, IGRA cannot impose a separate authorization requirement. Two courts have already rejected that reading. The Ninth Circuit, in Blue Lake Rancheria versus Kalshi, ruled that IGRA applies regardless of CFTC oversight. The Wisconsin district court followed. The Seventh Circuit now takes the question fresh.

I want to be direct about where the consensus sits and why I think it is reading this slightly wrong. Most of the analysis I have seen treats the Seventh Circuit's intervention as procedural — a housekeeping step before the inevitable affirmance. The two prior rulings are read as a pattern. I read them differently. Two district-level determinations and a Ninth Circuit ruling establish a trend, but the Seventh Circuit would not have granted the petition if it saw this as settled. Appellate courts that agree with the lower court's reasoning typically let interlocutory appeals die. This one did not.

The mechanism that concerns me is jurisdictional overlap, not substantive law. The CFTC's authority over designated contract markets is explicit and broad. IGRA's authority over gaming on tribal lands is also explicit and broad. Congress has not resolved what happens when both apply simultaneously to the same transaction. That ambiguity is precisely the kind of question appellate courts take up — and precisely the kind of question where prior rulings from different circuits carry less weight than they appear to.

My own tendency runs toward the downside scenario, and I am aware of it here. A Seventh Circuit ruling that narrows IGRA's reach over CFTC-regulated platforms would be genuinely disruptive — to tribal compacts, to state gaming frameworks, to the assumption that federal CFTC registration does not preempt sovereign gaming rights. I have adjusted for that bias. Even accounting for it, I think the market treating this as a near-certain affirmance is mispriced in the direction of overconfidence.

There is an active market on Kalshi's broader legal exposure, and I think it underweights the possibility that the Seventh Circuit produces a split with the Ninth — which would, in turn, create the conditions for Supreme Court review. A circuit split on the IGRA-CFTC intersection would put the entire tribal land question before the Court within two years.