Kalshi Takes Tribal Sovereignty Fight to Ninth Circuit Over Sports Markets

Three California tribes have asked the Ninth Circuit to revive their bid to block Kalshi’s sports event contracts on tribal lands. The appeal opens a new front in the prediction market’s regulatory fight: whether its federal exchange status can shield it from tribal governments invoking federal Indian gaming law.

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.

That position prevailed before US District Judge Jacqueline Scott Corley. Although Corley found that Secretarial Procedures are functionally equivalent to compacts under IGRA, she 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 also 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 further 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.