Ninth Circuit Reverses Kalshi Tribal Injunction Ruling

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Fri Sep 18, 2026, 10:00 am ET

Read Time: 5 minutes

Ninth Circuit Reverses Kalshi Tribal Injunction Ruling

industry

The Ninth Circuit has reversed a lower court decision denying two California tribes' preliminary injunction request against Kalshi. The ruling targets the prediction market's sports event contracts offered on tribal lands.

A three-judge panel found that Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians were likely to succeed under the Indian Gaming Regulatory Act (IGRA). The court also found potential violations of tribal gaming ordinances.

The decision sends the case back to the U.S. District Court for further proceedings. It could also add another legal hurdle for prediction markets offering sports contracts alongside US online sportsbooks.

Ninth Circuit Finds Kalshi Contracts Likely Constitute Class III Gaming

The Ninth Circuit examined whether Kalshi's sports event contracts qualify as Class III gaming under IGRA. The tribes needed to establish that the contracts constituted gaming on Indian lands.

The panel concluded that Kalshi's contracts likely meet that definition. The judges focused on the similarities between prediction contracts and traditional sports wagers.

"In practice, what Kalshi labels 'sports event contracts' neatly track the activities described in IGRA and its implementing regulations," the judges wrote. They added that the similarities with traditional sports wagers were "overwhelming."

The court also cited Department of the Interior regulations addressing tribal gaming. Those rules identify Class III gaming through three elements.

The panel noted that those elements are chance, consideration, and prize or reward. It concluded that Kalshi's sports contracts satisfy those requirements.

That finding directly addresses one of the central disputes surrounding prediction markets. Kalshi describes its products as exchange-traded derivatives rather than conventional sports wagers.

However, the Ninth Circuit's analysis focused on how those contracts operate on tribal lands. The decision therefore creates a distinct legal issue for Kalshi beyond the broader debate over sports betting.

Court Says Contracts Were Made on Tribal Lands

The panel also considered where Kalshi's sports event contracts were located. The tribes argued that users entered the contracts while physically present on tribal territory.

The Ninth Circuit agreed with that position. The judges concluded that the tribes had demonstrated the contracts were "located on Indian lands."

That finding proved important because IGRA applies to gaming conducted on Indian lands. The court therefore connected Kalshi's online transactions with the location of participating users.

The ruling could have implications for how prediction markets approach tribal territories. It also highlights a jurisdictional distinction between online contract platforms and traditional gaming operations.

For the California gambling market, the case adds another layer to an already complex regulatory environment. Tribal gaming operates under federal law, tribal regulations, and applicable state-tribal compacts.

Tribal Authorization Becomes a Key Issue

The Ninth Circuit also found that Kalshi's contracts were not authorized under the tribes' gaming procedures.

The judges explained that the tribes' procedures permit Class III gaming only when tribes authorize it. Such gaming must also operate through the established tribal regulatory structure.

"Thid, the tribes demonstrated that Kalshi was offering the contracts in violation of the tribes' secretarial procedures," the panel wrote.

The judges further explained that those procedures incorporated the tribes' gaming ordinances. Because the ordinances did not authorize Kalshi's sports contracts, the panel found an additional violation.

The court also connected that finding to the tribes' compact with California.

The judges wrote that Kalshi's contracts therefore violated the compact between the tribes and the State of California. This creates a separate issue from whether federal regulators can oversee Kalshi's exchange.

Kalshi Maintains Its CFTC Regulatory Defense

Kalshi continues to argue that federal derivatives law governs its exchange-traded contracts. The company has maintained that the Commodity Futures Trading Commission has exclusive authority over its on-exchange derivatives.

Following the decision, Kalshi spokesperson Elisabeth Diana said the company was reviewing its options. She also indicated that an appeal remained possible.

Kalshi's position creates a direct tension between federal derivatives regulation and tribal gaming authority. The Ninth Circuit's ruling does not eliminate Kalshi's CFTC registration.

Instead, it addresses whether the company can offer specific sports contracts on tribal lands without tribal authorization. The distinction could remain important as courts consider similar disputes involving prediction markets.

The decision also follows another Ninth Circuit ruling involving Kalshi's sports contracts. That case involved Nevada regulators and raised separate questions about state oversight.

Consequently, Kalshi now faces multiple legal challenges over the regulatory treatment of sports event contracts. The cases involve different legal frameworks, including federal derivatives law, state gambling rules, and tribal gaming authority.

Ruling Adds Pressure to Kalshi's Sports Market

The latest decision does not establish that every Kalshi sports contract violates IGRA. Instead, the ruling concerns contracts offered on the lands of the two California tribes involved.

The case now returns to the lower court for further proceedings. The district court must address the remaining factors related to the tribes' preliminary injunction request.

Still, the ruling provides a significant development in the wider dispute over prediction-market sports contracts. It gives tribal sovereignty a central role in determining whether such contracts can operate on Indian lands.

Meanwhile, the distinction between prediction markets and traditional sports wagering remains under judicial scrutiny. That debate could continue shaping the relationship between platforms such as Kalshi and the broader US online sportsbooks industry.

For California gambling, the case also reinforces the importance of tribal authorization when gaming activity occurs on tribal territory.

Jonathan Rodriguez
Jonathan Rodriguez

Jonathan is an avid basketball fan, and is often looking forward to the next upcoming NBA season when not checking players' stats during games. He also likes to keep his ears on the ground for the latest rumblings in the online casino industry.

This site contains commercial content. We may be compensated for the links provided on this page. The content on this page is for informational purposes only. Betting News makes no representation or warranty as to the accuracy of the information given or the outcome of any game or event.