US Appeals Court Blocks Kalshi's Event Contracts on California Tribal Lands

A federal appeals court on Wednesday barred Kalshi from offering sports event contracts on the lands of two California tribes, delivering the largest US prediction market platform its second legal setback in less than a month.

The 9th US Circuit Court of Appeals in San Francisco ruled 3-0 that Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, both federally recognized tribes, were entitled to a preliminary injunction. The court found the tribes would likely succeed in showing that Kalshi's contracts violated the federal Indian Gaming Regulatory Act (IGRA) and the tribes' own gaming ordinances.

The decision came on the same day the same court, on August 28, held that Kalshi was subject to oversight by Nevada gaming regulators.

Writing for the panel, Circuit Judge Margaret McKeown said a lower court judge had erred in denying the injunction because each Kalshi event contract amounted to "an act of placing a bet or wager" that neither the Interior Secretary nor the tribes' gaming ordinances expressly authorized. She rejected Kalshi's argument that IGRA was displaced by the federal Unlawful Internet Gambling Enforcement Act, noting that statute does not cover the company's event contracts.

"IGRA thus confers upon the tribes a cause of action to enjoin Kalshi's sports event contracts on their lands," McKeown wrote.

The two tribes permit gaming on their reservations under procedures set by the US Department of the Interior, but said no procedures or compacts allow non-tribal entities such as Kalshi to do the same.

Les Marston, a lawyer for the tribes, called the ruling "a tremendous victory" and said Kalshi could have spent a few million dollars to geofence the tribes' operations.

The case now returns to US District Judge Jacqueline Scott Corley in San Francisco, who denied a preliminary injunction last November.

The ruling is also a defeat for Robinhood Markets, which had said it would lose substantial business if it could not route customers' event contract orders through Kalshi. A Robinhood spokesperson said the company is evaluating its legal options and expressed respect for Native American tribes and their sovereignty.

Kalshi spokesperson Elisabeth Diana said the company may appeal, arguing the ruling is hard to square with other federal laws that leave regulation of on-exchange derivatives trades exclusively to the Commodity Futures Trading Commission (CFTC).

The dispute is part of a nationwide battle over whether platforms that let people wager on sports and other events should be regulated as gambling or as federally licensed financial markets. Kalshi's platform also allows wagers on elections, economics, the weather and cultural events.

Many analysts expect the US Supreme Court to eventually decide who regulates prediction markets, and Robinhood has asked it to take up the question. The CFTC, under Republican President Donald Trump, has claimed exclusive oversight, while many states disagree. A bipartisan coalition of 27 states and Washington, D.C., backed the tribes' appeal, arguing that a ruling for Kalshi would undermine their longstanding authority to stop illegal gambling and address harms linked to legal gambling.