The appeal pits tribal authority under IGRA against Kalshi’s claim that a CFTC-registered exchange is governed by commodities law, with 27 states and Washington, D.C., backing the tribes.
The Ninth Circuit heard arguments on July 10 over whether Kalshi can keep offering sports event contracts on the lands of three California tribes while their lawsuit proceeds. Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians and Picayune Rancheria of the Chukchansi Indians are challenging a November decision that denied a preliminary injunction against Kalshi and Robinhood. The case turns on whether IGRA (federal law governing tribal gaming) can be used against a company that is not party to the tribes’ gaming compacts or Secretarial Procedures. Attorney Lester Marston argued Kalshi is offering unauthorized Class III gaming from Indian lands in violation of tribal ordinances and that tribal protections would be weakened if an outside company could avoid suit simply because it is not named in those agreements. Kalshi attorney Grant Mainland said the governing documents regulate what the tribes themselves may offer, not what an independent online exchange regulated under the Commodity Exchange Act may list. US District Judge Jacqueline Scott Corley previously found the Secretarial Procedures functionally equivalent to compacts under IGRA, but said the relevant provisions did not bar Kalshi’s conduct. She also held that UIGEA (U.S. law restricting unlawful online gambling payments) governed the disputed internet transactions, and that its definition of a bet or wager excludes transactions on a registered entity under the Commodity Exchange Act. Corley further concluded that the CFTC (U.S. derivatives regulator) had exclusive jurisdiction over whether Kalshi’s event contracts comply with commodities law. The appeal lands amid a broader fight over federal preemption, with Massachusetts, California, 25 other states and Washington, D.C., filing an amicus brief for the tribes. The Ninth Circuit also refused to transfer the matter to the panel handling Kalshi’s Nevada litigation, citing “significant differences” between the cases. A separate Wisconsin ruling in favor of the Ho-Chunk Nation has created a split, raising the stakes for how far Kalshi’s federal exchange status shields it from tribal gaming challenges.