Ninth Circuit Says Kalshi's Sports Contracts Are Class III Gaming on Tribal Land

A second unanimous panel in three weeks has ruled against the exchange, this time for two California tribes under the Indian Gaming Regulatory Act. The court held that IGRA and the Commodity Exchange Act "simply address two different questions", and sent the case back for an injunction. Lawyers on the tribal side are already talking about geofencing reservations.

• The United States Court of Appeals for the Ninth Circuit ruled 3-0 on Wednesday that the Blue Lake Rancheria and the Chicken Ranch Rancheria of Me-Wuk Indians are likely to succeed in their claim that Kalshi's sports event contracts on their lands violate the Indian Gaming Regulatory Act, reversing a district court's denial of a preliminary injunction, CDC Gaming and InGame report
• Judge Margaret McKeown, writing for a panel with Chief Judge Mary Murguia and Judge Richard Paez, found each contract was "an act of placing a bet or wager" that neither the Interior Department nor the tribes' ordinances authorised, and that the similarities to a sports wager "are overwhelming"
• The court held that IGRA and the Commodity Exchange Act are not irreconcilable and must be harmonised: the CEA governs what trades on a designated contract market, IGRA governs Class III gaming on Indian lands
• The case, which also names Robinhood, returns to the Northern District of California to decide the remaining injunction factors; the injunction is not yet in force, and Kalshi was still considering an appeal late on Wednesday
• It is Kalshi's second Ninth Circuit loss after the Nevada ruling on 28 August, decided by a different panel and now stayed pending an en banc petition

A Different Panel Reaches the Same Place by a Different Road

The Ninth Circuit ruled on Wednesday, 16 September, for two California tribes seeking to stop Kalshi and Robinhood offering sports event contracts on their reservations, according to CDC Gaming and InGame. The Blue Lake Rancheria and the Chicken Ranch Rancheria of Me-Wuk Indians sued in July 2025, alongside the Picayune Rancheria of the Chukchansi Indians, which later withdrew, arguing that the contracts are Class III gaming under the Indian Gaming Regulatory Act (IGRA) and infringe the exclusive gaming rights the tribes hold under their compacts with California.

The district court had refused a preliminary injunction. Judge Jacqueline Scott Corley wrote that Kalshi "may have found a way around prohibitions on interstate gambling that were created with the Tribes' best interest in mind" through the Commodity Exchange Act's self-certification process, but that the tribes had not shown a likelihood of success, reasoning that the transactions did not occur on Indian lands and that the Unlawful Internet Gambling Enforcement Act, not IGRA, controlled, as InGame recounts.

A unanimous panel of Chief Judge Mary Murguia and Judges Margaret McKeown and Richard Paez reversed on the IGRA claim. In a 38-page opinion by McKeown, the court held that the tribes "were likely to succeed in their claims that Kalshi's sports event contracts on tribal lands violated IGRA and the tribes' gaming ordinances". Each contract, McKeown wrote, was "an act of placing a bet or wager" that neither the Department of the Interior nor the tribes' regulations authorised; UIGEA does not cover event contracts and does not supplant IGRA; and "IGRA thus confers upon the tribe a cause of action to enjoin Kalshi's sports-event contracts on their lands". On the substance: "In practice, what Kalshi labels 'sports-event contracts' nearly track the activities described in IGRA and its implementing regulations. The similarities between a sports-event contract, which even Kalshi calls 'sports betting', and a traditional sports wager are overwhelming."

The panel did not treat the case as a preemption fight. "Because IGRA and the CEA are not 'irreconcilable', we must harmonize them," the opinion says, as quoted by InGame. "In so doing, we conclude that the two statutes simply address two different questions. The CEA gives the Commission 'exclusive' jurisdiction over covered derivatives trading on designated contract markets. IGRA governs Class III gaming activity located on Indian lands."

Not Yet an Injunction, but the Hard Part Is Done

The ruling does not itself stop Kalshi. The court remanded to the district court to decide the remaining Winter factors, irreparable harm, balance of hardships and the public interest, while noting that "likelihood of success on the merits is the most significant factor". If the injunction is granted, Kalshi and Robinhood would have to stop offering sports contracts on the two tribes' lands, and other tribes would be positioned to seek the same relief. The lower court's rejection of the tribes' Lanham Act claim, over Kalshi's advertising of its legality, was not disturbed, CDC Gaming reports.

Tribal gaming lawyer Scott Crowell called it a "very significant decision" on the Indian Gaming Association's webinar, and Daniel Wallach told CDC Gaming it "could open the floodgates for lawsuits against Kalshi", adding that "the end game could be geofencing around tribal reservations". Kalshi was still considering an appeal late on Wednesday. The decision came a day after the Senate rejected the CLARITY Act, whose omission of an IGRA non-preemption clause was tribal gaming's central objection, and two days after New York's federal court asked the CFTC why it should grant an injunction other courts had refused.

Harmonising the Statutes Is a Worse Result for Kalshi Than Losing a Preemption Fight

The exchanges' legal theory everywhere is that the CEA's "exclusive jurisdiction" language displaces any other law that touches their contracts. The Ninth Circuit did not reject that language; it confined it. The CEA decides what may trade on a DCM, IGRA decides what gaming may occur on Indian land, and a contract can be lawful to list and unlawful to take from a customer standing on a reservation at the same time. That reading requires no finding that the CFTC was wrong to let the contracts self-certify, which is why it is so hard to appeal, and it is transferable: every state gambling statute can be described as answering "a different question" from the CEA in exactly the same way. The Nevada panel got to a similar place through the swaps definition; this panel got there through statutory harmony, and the Supreme Court now has two routes to choose from if it takes the petitions on 28 September.

Two Rancherias Have Just Been Handed What CLARITY Refused to Give

The Indian Gaming Association spent the summer demanding a statutory clause saying federal commodities law does not preempt IGRA, and the Senate declined to legislate it on Tuesday. On Wednesday a federal appeals court supplied the substance of that clause as a matter of existing law. It is narrower than a statute, because it binds only within the Ninth Circuit and only for tribes that sue, and it is broader in one respect, because it comes with an injunction remedy the bill never offered. The floodgates Wallach describes are real: there are several hundred federally recognised tribes, most with gaming ordinances, and each now has a template. The practical remedy, geofencing reservations, is technically trivial and commercially trivial too, since reservations are a small share of any exchange's customers. What it costs Kalshi is the principle that its product is the same everywhere, which is the principle its entire regulatory position depends on.

Kalshi's Losing Streak Now Runs Through Every Kind of Court

A state court in Nevada, a federal district court in Connecticut, the Tenth Circuit on an emergency motion, and now two Ninth Circuit panels on two different theories. The exchange's remaining wins are older, in the Third Circuit against New Jersey and at the district court level in the cases now being reversed, and its most reliable ally is its own regulator, whose emergency orders can keep an exchange open but cannot overrule a circuit. An en banc petition on this ruling would stay it, as the Nevada petition did, and would buy the same thing: time through the football season. Time is the asset the courts have been steadily repricing.

The Ninth Circuit has now said twice that a sports event contract is a bet. The only court left that can say otherwise convenes on 28 September.