Ninth Circuit Revives Tribal Injunction Bid Against Kalshi Sports Contracts

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit has reversed a district court's refusal to preliminarily enjoin Kalshi's sports event contracts on California Indian lands, holding that the Blue Lake Rancheria and the Chicken Ranch Rancheria of Me-Wuk Indians are likely to succeed on their central claim: that trades placed from within tribal territory amount to unauthorized Class III gaming under the Indian Gaming Regulatory Act. The decision is the most consequential appellate statement yet on whether prediction market platforms can route around tribal gaming exclusivity, and it arrives while parallel cases move through district courts in New Mexico, Wisconsin and Washington.

The two tribes sued Kalshi and Robinhood in 2025, arguing that federally regulated event contracts on sporting outcomes are functionally identical to the sports wagering their compacts govern. The district court denied a preliminary injunction, accepting the platforms' position that the Commodity Exchange Act occupies the field and displaces state and tribal gaming law. The Ninth Circuit rejected that framing on the record before it, concluding that the tribes had made the necessary showing on the merits. What the panel did not do is order Kalshi to stop.

The ruling turns on where the wager is placed

The panel's reasoning is territorial rather than categorical. The question it answered was not whether event contracts are gambling everywhere, but whether a contract entered from a location inside Indian lands falls within IGRA's definition of Class III gaming — and therefore within the scope of the tribal-state compact framework that governs those lands. That distinction matters enormously for how the decision will be applied. A platform that can demonstrate a user was physically off-reservation when the trade cleared occupies very different ground from one that cannot.

It also puts geolocation infrastructure at the center of a dispute that began as a preemption argument. Tribal sportsbook operators already run geofencing to satisfy compact terms that restrict wagering to on-reservation servers and, in hub-and-spoke states, to state boundaries. Prediction market exchanges were built on the premise that their national footprint made location irrelevant. The Ninth Circuit's framing suggests that premise is now a litigable fact question, and one that tribes are positioned to develop through discovery.

For readers tracking how exclusivity provisions are written and enforced, our legal guide to IGRA and Class III gaming sets out the compact architecture the panel was interpreting.

Back to the district court on the remaining factors

The case now returns to U.S. District Judge Jacqueline Scott Corley, who must work through the preliminary injunction factors the appellate panel did not reach: irreparable harm, the balance of equities and the public interest. That is not a formality. Likelihood of success is only the first of four elements, and the remaining three are where prediction market defendants have consistently made their strongest showings — arguing that a shutdown order would disrupt a federally registered exchange, that displaced volume would migrate offshore, and that any tribal loss is quantifiable in dollars and therefore compensable.

Tribal plaintiffs answer that exclusivity is a sovereign prerogative, not a revenue line, and that harm to a negotiated governmental right cannot be made whole with damages. That argument has found purchase with some district judges and not others. Judge Corley's handling of it will set the template for how the remaining California actions are resolved.

A merits ruling that a product is unlawful and an order that the product stop are separate judicial acts. Tribes have now secured the first in the Ninth Circuit. The second remains contested.

What it changes for California tribes and beyond

California is the largest tribal gaming market in the country, with more than 60 operating properties and no legal sports wagering framework of any kind. That combination is precisely why prediction markets became a flashpoint there: platforms were offering sports-outcome contracts to California residents in a state where tribes had twice declined to advance their own sports betting measures. Operators across the California market have argued that the asymmetry inverts the bargain their compacts embody.

The practical effect of this week's decision is leverage rather than closure. Tribes now hold a published circuit opinion that event contracts on Indian lands are Class III gaming — a holding that can be cited in the New Mexico litigation, in Wisconsin, and in the regulatory comment record before the Commodity Futures Trading Commission. It also strengthens the position of tribal coalitions pressing Congress for a statutory fix, since the ruling narrows the preemption defense without eliminating the underlying business.

Kalshi has options. It can seek rehearing en banc, petition for certiorari, or litigate the remand aggressively while continuing to operate. It can also adjust its product — restricting sports contracts by geography in the way sportsbooks already do — which would concede the territorial point while preserving the national market. Each path has costs, and none resolves the broader question of whether Congress intended the Commodity Exchange Act to reach consumer wagering on athletic events at all.

For the sequence of filings, hearings and appellate arguments that produced this result, see our coverage of the Ninth Circuit oral arguments and the broader prediction markets and tribal exclusivity file.

The unresolved federal question

None of this settles the jurisdictional conflict at the root of the dispute. The CFTC has not issued a final rule defining the status of sports event contracts, and legislative vehicles in both chambers remain in committee. Until one of those tracks produces something binding, the governing law will be assembled case by case from district court orders and circuit opinions that address narrow questions on incomplete records.

That is an unstable way to regulate a market that now processes billions in notional volume. It is also, for the moment, the only mechanism available. Tribal governments have made the reasonable judgment that litigation is faster than legislation, and the Ninth Circuit has given them something to build on.