Kalshi faced the Ninth Circuit on July 10 as Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians and Picayune Rancheria of the Chukchansi Indians challenged a lower-court decision allowing its sports markets to remain available on their lands. The tribes seek to block Kalshi contracts on tribal lands, arguing the prediction market offers unauthorized Class III gaming in violation of tribal gaming ordinances. The appeal follows a November order denying their request for a preliminary injunction against Kalshi and its distribution partner Robinhood, and reaches the Ninth Circuit amid a widening federal preemption split over whether event contracts belong exclusively under commodities law.
Kalshi and Tribes Present Competing IGRA Interpretations
Attorney Lester Marston, representing the tribes, argued that Kalshi is offering unauthorized Class III gaming from Indian lands in violation of tribal gaming ordinances. Marston told the panel that the ordinances cannot be separated from the compact and procedures because those agreements require gaming to comply with the tribes' regulatory frameworks, arguing that IGRA would provide little protection if an outside company could offer unauthorized gaming on their lands but avoid suit because its name does not appear in the governing agreements.
Kalshi attorney Grant Mainland urged the court to focus on the agreements' text. The prediction market is not a party to any of them, he argued, and the cited provisions govern what the tribes may offer rather than what an independent, federally regulated exchange may make available online. Mainland said IGRA has not previously been used in the manner proposed by the tribes against an unrelated private company.
District Court Ruled UIGEA Governed Disputed Transactions
US District Judge Jacqueline Scott Corley found that Secretarial Procedures are functionally equivalent to compacts under IGRA, but concluded that the relevant provisions did not prohibit Kalshi's conduct. The documents address internet games offered by the tribes but are silent about companies such as Kalshi, according to her ruling.
Corley held that the Unlawful Internet Gambling Enforcement Act governed the disputed internet transactions. UIGEA's definition of a "bet or wager" excludes transactions conducted on a registered entity under the Commodity Exchange Act, and the judge found that Kalshi fell within that exclusion. She concluded that the Commodity Futures Trading Commission possessed exclusive jurisdiction to determine whether Kalshi's event contracts complied with commodities law. The ruling addressed only preliminary relief and did not finally decide the tribes' claims.
Twenty-Seven States and D.C. Filed Amicus Brief Supporting Tribes
The appeal has drawn support from Massachusetts, California, 25 other states and Washington, D.C. Their amicus brief argues that Kalshi's interpretation would allow a CFTC-registered exchange to bypass IGRA and tribal authority merely by placing sports wagers inside federally regulated contracts. The Ninth Circuit separately declined to send the dispute to the panel handling Kalshi's Nevada litigation, citing "significant differences" between the two appeals.
The California ruling conflicts with a Wisconsin decision finding that the Ho-Chunk Nation was likely to succeed on a similar IGRA claim against Kalshi. That split gives the Ninth Circuit's treatment of the California case significance beyond the three tribes involved. The underlying lawsuit is stayed until the Ninth Circuit rules in this appeal and Kalshi's separate Nevada case.
FAQ
What did the three California tribes argue in the Ninth Circuit on July 10?
Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians and Picayune Rancheria of the Chukchansi Indians argued that Kalshi is offering unauthorized Class III gaming from Indian lands in violation of tribal gaming ordinances. Their attorney Lester Marston told the panel that the ordinances cannot be separated from the compact and procedures because those agreements require gaming to comply with the tribes' regulatory frameworks.
How did US District Judge Jacqueline Scott Corley rule on the tribes' preliminary injunction request?
Judge Corley denied the preliminary injunction in a November order. She found that Secretarial Procedures are functionally equivalent to compacts under IGRA, but concluded that the relevant provisions did not prohibit Kalshi's conduct because the documents address internet games offered by the tribes but are silent about companies such as Kalshi. She held that UIGEA governed the disputed transactions and that the CFTC possessed exclusive jurisdiction to determine whether Kalshi's event contracts complied with commodities law.
How many states filed an amicus brief supporting the tribes in this appeal?
Twenty-seven states and Washington, D.C., filed an amicus brief supporting the tribes. The brief argues that Kalshi's interpretation would allow a CFTC-registered exchange to bypass IGRA and tribal authority merely by placing sports wagers inside federally regulated contracts.
