Ninth Circuit Backs California Tribes in Kalshi Dispute
United States.- 18 September 2026 | www.zonadeazar.com The US Court of Appeals for the Ninth Circuit has handed two California tribes a significant victory in their legal dispute with Kalshi over sports event contracts accessed from tribal lands.
The court concluded that Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians are likely to succeed on their claims under the Indian Gaming Regulatory Act, IGRA, finding that Kalshi’s sports contracts offered to users on tribal lands may constitute unauthorised Class III gaming.
Case Against Kalshi and Robinhood
The litigation was brought against both Kalshi and Robinhood, which distributes Kalshi event contracts to retail customers.
The tribes challenged the ability of users located on their lands to enter sports-related contracts without that activity having been authorised under their gaming regimes.
Sports Contracts Treated as Class III Gaming
The Ninth Circuit said the similarities between Kalshi’s sports event contracts and conventional sports betting were substantial.
Users pay consideration to take a position on an uncertain sporting outcome and receive a return if that outcome occurs.
Kalshi offers markets involving winners, point spreads, totals, player propositions and multi-selection combinations.
User Location Is Critical
A central issue was where the gaming activity takes place.
The court concluded that where a customer enters a sports event contract while physically located on Indian lands, the wagering activity can occur on those lands even if Kalshi’s servers and backend infrastructure are located elsewhere.
Tribal Regulatory Authority
IGRA establishes the federal framework governing gaming on Indian lands.
Both tribes operate gaming regimes that control how Class III activity may be authorised under federally recognised procedures.
The court found that unaffiliated non-tribal businesses cannot avoid those rules solely by delivering their products online.
Lower-Court Decision Reversed in Part
The district court had initially denied the tribes’ request for a preliminary injunction.
It reasoned that Kalshi was not itself a party to the relevant tribal compacts or regulatory procedures.
The Ninth Circuit found that interpretation legally incorrect.
IGRA Can Apply to Third Parties
The appeals court held that IGRA does not require a non-tribal company to be expressly named in a compact or tribal procedure before applicable gaming rules can reach its conduct.
The focus is instead on the gaming activity itself and where it takes place.
Kalshi Relied on the Commodity Exchange Act
Kalshi argued that its products are traded on a federally designated contract market regulated by the Commodity Futures Trading Commission, CFTC.
It therefore maintained that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over those contracts.
Ninth Circuit Rejects Exclusivity Argument
The court said the CEA and IGRA address separate regulatory questions.
The CEA governs the CFTC’s jurisdiction over covered derivatives trading on designated contract markets.
IGRA separately governs Class III gaming activity taking place on Indian lands.
Federal commodities regulation therefore does not automatically displace IGRA.
One Product, Different Regulatory Questions
The ruling recognises that the same transaction can potentially fall within different legal frameworks.
A contract may be eligible to trade within a CFTC-regulated market while still having to satisfy additional legal requirements when offered to a customer located on tribal land.
UIGEA Does Not Displace IGRA
Kalshi also relied on provisions of the Unlawful Internet Gambling Enforcement Act, UIGEA.
The Ninth Circuit rejected that argument, noting that UIGEA expressly preserves the application of IGRA to gaming activity on Indian lands.
Advertising Claim Rejected
The tribes separately challenged Kalshi advertising stating that sports betting was legal in all 50 states through its platform.
On this issue, the appeals court affirmed the lower court.
It held that, given the unsettled legal status of the products, the claim amounted to a legal opinion rather than a factual representation capable of supporting the tribes’ Lanham Act action.
Not Yet a Final Ban
The ruling does not finally resolve the entire dispute or itself impose a permanent prohibition.
The Ninth Circuit held that the tribes are likely to prevail on the merits of their IGRA claims and returned the case to the district court.
That court must now consider the remaining factors required before granting a preliminary injunction.
Another Major Prediction-Market Case
The decision adds to a growing body of litigation surrounding sports event contracts in the United States.
The central dispute concerns the boundaries between federal CFTC oversight and the separate authority of state, tribal and other federal gambling regimes.
Industry Context
Kalshi maintains that its products are federally regulated financial contracts.
States, tribes and gaming regulators have argued in several proceedings that certain sports event contracts operate in substance as wagering and should therefore also comply with gambling laws.
Federal appellate courts have reached differing conclusions in related cases, leaving the broader regulatory question unresolved.
Next Steps and Impact
The litigation will return to the district court for consideration of the remaining preliminary-injunction factors.
If relief is ultimately granted, Kalshi could be required to prevent users located on Blue Lake Rancheria and Chicken Ranch Rancheria lands from entering affected sports event contracts.
Beyond those two tribal jurisdictions, the ruling adds another significant precedent to the debate over the interaction between prediction markets, federal commodities law and tribal authority over gaming on Indian lands.
Editó: @fonta
