Ninth Circuit Judges Press Kalshi on Why Sports Contracts Aren’t Just Betting in Tribal Lands Appeal

A Ninth Circuit Court of Appeals panel spent much of Friday’s oral argument grilling Kalshi’s attorneys on why the company’s sports-based event contracts shouldn’t be treated the same as traditional sports betting when offered on tribal land. The hearing centered on an appeal brought by Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians, three California tribes trying to reverse a lower court’s refusal to block Kalshi’s sports contracts from reaching their reservations.

The case is one of the most closely watched legal battles in the prediction markets space, with implications for how far federally regulated exchanges can push into territory long governed by state and tribal gaming law. At stake is whether Kalshi’s yes-no contracts on game outcomes amount to unauthorized Class III gaming under the Indian Gaming Regulatory Act, or whether they fall outside that framework entirely because they’re regulated by the Commodity Futures Trading Commission rather than state gaming authorities.

How the Case Reached the Appeals Court

The dispute traces back to a November ruling from U.S. District Judge Jacqueline Scott Corley, who denied the tribes’ request for a preliminary injunction against Kalshi. Corley found the tribes had not shown they were likely to prevail on the merits, concluding they hadn’t identified specific language in Picayune’s gaming compact or the federal procedures governing Blue Lake and Chicken Ranch that would prohibit Kalshi’s sports contracts. She also determined that the Unlawful Internet Gambling Enforcement Act, rather than IGRA, was the more applicable framework for evaluating the online transactions at issue.

The tribes appealed that decision, arguing Corley’s reasoning ignored the practical reality that Kalshi’s sports contracts function identically to sports wagers for anyone accessing the platform from tribal land. During Friday’s hearing, the three-judge panel appeared open to preliminarily blocking Kalshi and Robinhood from offering sports contracts on tribal land, with one judge stating outright that Kalshi’s contracts “sound like a bet” subject to Native American gambling laws, while another judge suggested it “wouldn’t be so unreasonable” to exclude tribes from federal oversight in this area.

What a Reversal Would and Wouldn’t Change

Even if the Ninth Circuit sides with the tribes, the ruling wouldn’t automatically resolve the underlying lawsuit or permanently bar Kalshi from operating near tribal lands. A reversal would most likely send the injunction question back to Corley for reconsideration, requiring her to reassess both the tribes’ likelihood of success and whether they’ve demonstrated the kind of immediate, irreparable harm needed to justify blocking Kalshi’s operations while litigation continues.

The panel did not rule from the bench and gave no indication of when it might issue a decision. The underlying district court case remains stayed while the appeals court considers this matter, and it comes on the heels of a separate but related Ninth Circuit hearing earlier this year involving Nevada’s attempt to enforce its own gaming laws against Kalshi, Robinhood, and Crypto.com, where judges were similarly skeptical of the prediction markets’ arguments for federal preemption.

The stakes extend well beyond these three tribes. California’s broader tribal gaming coalition has cited the rapid growth of prediction markets as a central threat to their sovereignty and revenue, with tribal leadership recently reaffirming plans to pursue a 2028 ballot initiative for tribally led sports betting, partly in response to platforms like Kalshi operating in a regulatory gray area. Bettors curious how these platforms differ from traditional books can review our prediction markets vs sports betting guide, and those tracking the broader legal landscape can check whether prediction markets are legal in their state. However this appeal shakes out, it’s likely to shape how aggressively tribes across the country pursue similar litigation against operators like Kalshi going forward.