Ninth Circuit Revives Tribal Challenge to Kalshi Sports Contracts

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit on 16 septembre 2026 revived two California tribes’ bid to block Kalshi’s sports event contracts on tribal lands, holding in a published opinion that the tribes are likely to show the contracts are unauthorized class III gaming under the Indian Gaming Regulatory Act and the tribes’ gaming ordinances.

Circuit Judge M. Margaret McKeown wrote the opinion, joined by Chief Judge Mary H. Murguia and Circuit Judge Richard A. Paez. The panel reversed in part an order by U.S. District Judge Jacqueline Scott Corley of the Northern District of California, who had denied a preliminary injunction sought by Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians against Kalshi and Robinhood. The appeal was argued on 10 juillet 2026, in San Francisco, and a third tribe, Picayune Rancheria of the Chukchansi Indians, was dismissed without prejudice after oral argument under a joint stipulation of the parties.

Blue Lake Rancheria covers roughly 26 acres of trust and fee lands in Humboldt County, and Chicken Ranch Rancheria covers roughly 40 acres in Tuolumne County. Both tribes conducted gaming under a 1999 compact with California that was set to expire at the end of 2020 before the parties agreed to extend it through 2023. After successor negotiations stalled, the Ninth Circuit held in 2022 that California had failed to negotiate in good faith. A court-appointed mediator selected the tribes’ proposed compact, California declined to consent, and the Secretary of the Interior prescribed class III gaming procedures for each tribe on 31 janvier 2024.

Amicus briefs in the appeal were filed by the American Gaming Association; by the Indian Gaming Association, the National Congress of American Indians, several state Indian gaming associations, and 15 federally recognized tribes; by the attorneys general of Massachusetts, California, 25 other states, and the District of Columbia; and by Paradigm Operations LP.

The Companies and the Contracts

KalshiEX LLC operates a derivatives exchange licensed by the Commodity Futures Trading Commission as a designated contract market, through which users buy and sell derivatives the company styles as event contracts. Robinhood Derivatives LLC, owned by Robinhood Markets Inc., is a futures commission merchant registered with the commission, and the two companies have partnered to let users located nearly anywhere in the United States enter into the contracts.

The challenged contracts are binary. A customer picks one side of a sporting outcome, the contract pays out if the designated team or athlete prevails, and it expires worthless if it does not. Kalshi lists point spreads, over-under totals, and player propositions, and it lets users stack multiple predictions on the same game into custom parlays it calls combos. Kalshi filed its first self-certification to list sports event contracts on 22 janvier 2025. The opinion cited trading data suggesting that up to 90 percent of Kalshi’s trading volume comes from sports.

Class III Gaming on Indian Lands

To show a likelihood of success on their claim under the act, the tribes must establish that the contracts are class III gaming, that they are located on Indian lands, and that they are conducted in violation of the governing compact or procedures. The panel held the tribes were likely to succeed on each element. On the first, the opinion pointed to the statute’s residual definition of class III gaming, which covers all forms of gaming that are not class I or class II, and to National Indian Gaming Commission regulations placing any sports betting in class III. The analysis is functional, Judge McKeown wrote: a user pays consideration to take a position on the uncertain outcome of a sporting event and receives a reward if that outcome occurs.

Judge McKeown illustrated the holding with a customer standing on the floor of the Blue Lake Casino Hotel who buys a $100 Kalshi contract that pays if the San Francisco Giants win and separately wagers $100 on the same outcome on DraftKings, an online sportsbook. “The bettor, the place, the stake, and the contingency remain the same,” she wrote. “The only thing that changes is Kalshi’s vocabulary.”

On the second element, the panel held the contracts are located on Indian lands when a user enters into one from tribal territory. Kalshi may be headquartered in New York and its back-end infrastructure may sit off the rancherias, but the act of placing a wager occurs where the bettor is. On the third, the panel held that the tribes’ secretarial procedures, which treat class III gaming as lawful only when tribally authorized and conducted through the tribal regulatory structure, incorporate gaming ordinances that prohibit all gaming on each rancheria except as expressly authorized. Because those ordinances do not authorize Kalshi’s sports event contracts, the contracts also violate the compact between the tribes and California.

UIGEA, the CEA, and the Lanham Act

The panel rejected Kalshi’s argument that the Unlawful Internet Gambling Enforcement Act displaces the Indian Gaming Regulatory Act. That statute exempts transactions conducted on entities registered with the commission from its definition of a bet or wager, but the panel held the exemption cannot erase the tribal gaming law because Congress expressly disavowed altering or superseding it in civil proceedings tied to Indian lands. The better reading of the two statutes, the panel held, is that the Indian Gaming Regulatory Act provides a cause of action to enjoin class III gaming conducted improperly and at least in part on Indian lands, while the Unlawful Internet Gambling Enforcement Act governs payments connected to unlawful internet gambling.

The panel likewise held that the Commodity Exchange Act’s grant of exclusive jurisdiction to the commission does not reach the tribes’ claims, citing its 28 août 2026 holding that Kalshi’s sports event contracts are likely not swaps and stating it would reverse even if the contracts were swaps. It found implausible the notion that Congress took “a wrecking ball to all sports gambling regulations built up over decades by federal, state, and tribal governments when it amended the CEA to add the definition of swap,” repeating language from the August 28 decision.

The panel affirmed the district court’s conclusion that the tribes’ Lanham Act claim fails. Kalshi advertising announcing that consumers could bet on sports in all 50 states was a nonactionable lay opinion about legality, the panel held, and the legality of the contracts remains unsettled nationally. The opinion catalogued conflicting outcomes: the Third Circuit held the commodities law preempts state gaming regulation of the contracts, the Sixth Circuit refused to block Ohio’s gaming regulator pending appeal, a New York federal court held the commission’s exclusive jurisdiction does not preempt state gaming regulation, and a Maryland federal court held that jurisdiction is exclusive only as against the Securities and Exchange Commission. None of those cases involves event contracts on tribal lands.

The decision is the second by a Ninth Circuit panel to reject Kalshi’s position on sports event contracts since 28 août 2026, when a separate panel ruled 3-0 in Nevada’s favor and held that federal commodities law does not preempt the state’s gaming laws as applied to sports-event contracts offered by Kalshi, Crypto.com, and Robinhood, according to a Nevada Gaming Control Board announcement. Judge McKeown’s opinion cited that ruling repeatedly, including for the conclusion that the contracts are likely not swaps.

Because the tribes are likely to prevail on their claims under the Indian Gaming Regulatory Act, the panel sent the case back for the district court to weigh the remaining preliminary injunction factors in the first instance: the likelihood of irreparable harm, the balance of the equities, and the public interest. The panel directed the parties to bear their own costs on appeal and granted Kalshi’s motion to file a supplemental brief.