Tribal Gaming Victory
Ninth Circuit Rules Kalshi Sports Contracts Constitute Regulated Tribal Gaming
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Key Points
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California generally prohibits sports betting, although wagering is permitted at Native American casinos; the tribes argued Kalshi’s availability on tribal lands infringed their authority to regulate gambling there.
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Judge Margaret McKeown compared Kalshi’s contracts with a conventional sportsbook wager, writing: “The bettor, the place, the stake, and the contingency remain the same. The only thing that changes is Kalshi’s vocabulary.”
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To prevail on the preliminary-injunction claim, the tribes must show both that Kalshi’s contracts are Class III gaming and that the contracts occur on Indian lands; the appellate panel found the first requirement likely satisfied and sent the case back for the remaining analysis.
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The district court had previously concluded that the Commodity Exchange Act and the Unlawful Internet Gambling Enforcement Act, rather than IGRA, governed Kalshi’s products, but the Ninth Circuit found the tribes’ IGRA theory legally viable.
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The litigation originally involved three tribes, but the Picayune Rancheria of the Chukchansi Indians withdrew from the case in August, leaving Blue Lake Rancheria and Chicken Ranch Rancheria of the Me-Wuk Indians as plaintiffs.
A federal appeals court unanimously ruled that Kalshi's sports-event contracts likely violate federal Indian gaming law when offered on California tribal lands. Ninth Circuit Judge Margaret McKeown wrote that changing the name from "sports wager" to "event contract" does not change what the product actually is: "The bettor, the place, the stake, and the contingency remain the same. The only thing that changes is Kalshi's vocabulary." The court partly reversed a lower court's rejection of the tribes' request to block Kalshi from operating on their lands.
Two California tribes — Blue Lake Rancheria and Chicken Ranch Rancheria of the Me-Wuk Indians — argued that Kalshi's contracts are Class III gaming under the Indian Gaming Regulatory Act, which requires federal and tribal approval. The case now returns to the lower court to determine if the remaining requirements for an injunction are met. Legal Sports Betting noted the ruling significantly narrows Kalshi's defense that federal commodities law overrides tribal authority.
Why California Tribes Challenged Kalshi's Betting Platform
California law generally bans sports betting, but makes an exception for Native American casinos on tribal lands. The tribes argued that Kalshi's ability to offer sports contracts on their territories violated their exclusive right to regulate gambling within tribal boundaries. Play USA reported that the tribes have fought to protect this core authority since the 1980s. Robinhood, which partners with Kalshi, is also named in the case.
Judge Rejects Kalshi's Argument That It Sells Something Different
Kalshi claims its contracts are financial derivatives regulated by the Commodity Exchange Act, not gambling. The lower court had agreed, saying federal commodities law — not the Indian Gaming Regulatory Act — governs Kalshi's product. But the appellate panel disagreed sharply. Judge McKeown's comparison was blunt: a person betting $100 on the Super Bowl winner looks identical whether a sportsbook or Kalshi processes it.
The Ninth Circuit found the tribes' legal theory solid enough to move forward. Jurist reported the court concluded the Commodity Exchange Act and the Unlawful Internet Gambling Enforcement Act do not automatically override tribal gaming authority. The panel ruled the tribes had cleared the first hurdle for winning an injunction: proving Kalshi's contracts are Class III gaming.
Case Returns to Lower Court for Final Injunction Decision
The appellate ruling is not a final victory. The tribes must still prove that Kalshi's contracts physically occur on Indian lands to win a preliminary injunction blocking the product. The Circle News explained the case will go back to the trial court to determine whether users on tribal territory are actually accessing Kalshi's platform and whether the company should be blocked while the full case proceeds.
Originally three tribes filed the lawsuit, but the Picayune Rancheria of the Chukchansi Indians withdrew in August 2024. Tribal representatives called the appellate decision a win for tribal sovereignty and self-determination. The ruling highlights a widening conflict between prediction-market operators seeking federal commodity regulation and state and tribal officials defending their authority over gaming.
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