Blue Lake v. Kalshi Remand: What the Ninth Circuit Left Open

When the Ninth Circuit ruled in September that Kalshi's sports event contracts are Class III gaming when placed on tribal land, much of the commentary focused on the merits. But the court did not grant an injunction. It reversed the denial of a preliminary injunction on the tribes' Indian Gaming Regulatory Act claim and sent the case back to the district court to weigh the remaining factors. The Blue Lake Rancheria Kalshi remand now turns on questions of harm, equities, and public interest that will shape how much practical protection tribes actually receive.

What the Ninth Circuit decided, and what it left open

The decision in Blue Lake Rancheria v. Kalshi, Inc., No. 25-7504, was issued on September 16, 2026, by a unanimous panel of Chief Judge Mary H. Murguia and Judges M. Margaret McKeown and Richard A. Paez, with Judge McKeown writing. The plaintiffs are Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, who sued Kalshi and its retail distributor, Robinhood. The case came from Judge Jacqueline Scott Corley of the Northern District of California.

The panel held that the tribes are likely to succeed on their IGRA claim. It applied a functional test, treating a transaction in which a user pays to take a position on an uncertain sporting outcome and collects if it occurs as a wager, and it described Kalshi's "combos" as parlays under another name. It held that a wager occurs where the bettor is located, so a contract purchased on a reservation is gaming on Indian lands. It also concluded that neither the Unlawful Internet Gambling Enforcement Act nor the Commodity Exchange Act displaces IGRA for these purposes. Our earlier coverage of the Blue Lake ruling and the court's treatment of a closed system and nonparty enforcement cover those holdings in detail.

Two points frame the remand. First, the panel affirmed dismissal of the tribes' Lanham Act claim. Second, it returned the case so the district court could evaluate irreparable harm, the balance of equities, and the public interest. A likelihood of success is necessary for a preliminary injunction but not sufficient; the standard is explained in our guide to the preliminary injunction standard in tribal gaming litigation.

The Lanham Act ruling and its limits

The Lanham Act holding deserves attention beyond this case. The tribes had challenged Kalshi's advertising that sports betting is legal in all 50 states. The court treated that statement as non-actionable opinion on an unsettled legal question. The practical implication is that false-advertising theories may be a weak tool for tribes in disputes that turn on contested legal interpretation: when the underlying question is whether a product is lawful in a given place, a court may decline to treat a competitor's answer as a factual misrepresentation.

That leaves IGRA as the central enforcement vehicle. The panel's reasoning that tribal gaming ordinances barring unauthorized gaming by anyone create a closed system, and that a compact violation can be addressed even when the alleged violator is not a party to the compact, is what makes the statute useful here. It is also the part of the ruling most likely to be tested on further review.

The remaining injunction factors

On remand, the tribes must show they are likely to suffer irreparable harm without an injunction. This is an analytical discussion of arguments the parties can be expected to raise, not a prediction of the outcome. Tribes typically point to the threat to sovereign gaming revenue, which funds government services, and to the difficulty of recovering money damages from a defendant for unauthorized gaming on tribal land. They may also argue that diversion of customers to an unlicensed product is an injury to the exclusivity at the heart of the compact framework, a theme explored in our explainer on how tribal gaming exclusivity works.

Kalshi can be expected to dispute the scope and timing of harm, to argue that any injunction should be narrowly tailored, and to raise practical difficulties in identifying the location of users. The equities and public-interest factors give both sides room to argue. Tribes can point to the federal policy embodied in IGRA of supporting tribal self-sufficiency; the defendants can point to consumer access and to the regulatory framework under which they operate. How the district court weighs those considerations will determine whether the Ninth Circuit's legal conclusions turn into a concrete order.

Why the remand matters for the broader landscape

Litigation over event contracts is playing out across multiple courts, and decisions have been split. A scorecard of that litigation appears in our mid-2026 litigation scorecard. Many observers expect the question to reach the U.S. Supreme Court, and tribal amicus activity has already begun, as we noted in coverage of tribal nations asking the Supreme Court for review.

Meanwhile, tribal opinion is not uniform. Some tribes have launched prediction-market apps in partnership with Kalshi, while others have sought to stop the product, a divide analyzed in our piece on fracturing consensus on prediction markets. A strong injunction in California would affect the Ninth Circuit's tribes directly, but a narrower or delayed one would leave the practical landscape largely unchanged for now.

Tribes and operators in California should also watch how the ruling interacts with state-level dynamics; the California state hub collects our reporting on compacts and market developments there, and the Legal Guide explains the IGRA framework on which the case rests.

In sum, the Blue Lake decision is a significant legal win on the central question but not yet a remedy. The next phase will test whether the court is willing to translate that holding into relief, and on what terms. Until the district court rules, and until any further appellate or Supreme Court review concludes, the legal answer for tribes is stronger than it was but the commercial situation is unresolved.