In a decisive 3‑0 ruling, the 9th U.S. Circuit Court of Appeals in San Francisco issued a preliminary injunction that bars Kalshi, the nation’s largest prediction‑markets platform, from offering sports event contracts on the lands of two California tribes – the Blue Lake Rancheria and the Chicken Ranch Rancheria of the Me‑Wuk Indians. The court found that the platform’s contracts likely breach the federal Indian Gaming Regulatory Act (IGRA) and the tribes’ own gaming ordinances.
Legal reasoning and tribal sovereignty
Judge Margaret McKeown wrote that each Kalshi contract constitutes “an act of placing a bet or wager,” a activity the Interior Secretary and the tribes’ gaming codes have not authorized. The court rejected Kalshi’s argument that the Unlawful Internet Gambling Enforcement Act supersedes IGRA, noting that the federal law does not cover the type of event contracts at issue.
“IGRA thus confers upon the tribes a cause of action to enjoin Kalshi’s sports event contracts on their lands,” McKeown concluded, emphasizing the importance of respecting tribal sovereignty and the regulatory framework established by Congress.
Impact on the prediction‑market industry
The decision adds to a growing wave of legal challenges confronting prediction‑market operators. The platform, which also allows wagers on elections, weather, economics and cultural events, has been caught in a broader national debate over whether such contracts should be regulated as gambling or as federally licensed financial instruments.
The Commodity Futures Trading Commission, under President Trump’s administration, has asserted exclusive oversight of these contracts, a stance that many states dispute. A bipartisan coalition of 27 states and the District of Columbia backed the tribes, arguing that a ruling in Kalshi’s favor would undermine longstanding state authority to curb illegal gambling and address its associated harms.
Robinhood’s stake
Electronic‑trading platform Robinhood Markets, which routes its customers’ event‑contract orders through Kalshi, warned that the injunction could cost it substantial business. A Robinhood spokesperson said the company “has great respect for Native American tribes and their sovereignty,” while evaluating its legal options.
Kalshi’s response
Kalshi’s spokesperson, Elisabeth Diana, indicated the company may appeal, arguing that the ruling conflicts with other federal statutes that reserve regulation of exchange‑listed derivatives to the CFTC. “This ruling is hard to square with other federal laws,” she said.
What’s next?
The appeals court sent the case back to U.S. District Judge Jacqueline Scott Corley in San Francisco, who previously denied a preliminary injunction in November. The legal battle is likely to continue as both the industry and the federal government seek clarity on the proper regulatory regime for prediction markets.
For communities that value personal liberty, family stability, and respect for constitutional authority, the case underscores the need for clear, consistent rules that protect consumers while honoring tribal sovereignty and the rule of law.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
