Ninth Circuit Rules Tribes Likely to Prevail in IGRA Challenge to Kalshi Sports Event Contracts on Tribal Lands

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit ruled on September 16, 2026, that two California tribes are likely to succeed on their claim that Kalshi’s sports event contracts, when entered into by users on tribal lands, violate the Indian Gaming Regulatory Act (IGRA) and the tribes’ gaming ordinances. The panel reversed in part a November 2025 order by Judge Jacqueline Scott Corley of the Northern District of California that had denied the tribes’ request for a preliminary injunction against Kalshi, Inc., KalshiEX LLC, Robinhood Markets, Inc., and Robinhood Derivatives LLC.

The appeal was brought by Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians. A third tribe, Picayune Rancheria of the Chukchansi Indians, was dismissed from the appeal after oral argument pursuant to a joint stipulation of the parties, according to a footnote in the 38-page opinion, written by Judge M. Margaret McKeown and joined by Chief Judge Mary H. Murguia and Judge Richard A. Paez. The case was argued in San Francisco on July 10, 2026.

The contracts at issue

According to the opinion, KalshiEX LLC operates a designated contract market licensed by the Commodity Futures Trading Commission, through which users buy and sell binary “event contracts” that pay out based on the outcomes of sporting events. Robinhood acts as a retail distributor for the products. The opinion notes that Kalshi offers positions on point spreads, over/under game totals, and player propositions, and allows users to stack multiple predictions into parlays it calls “combos.” The panel observed that Kalshi’s sports offerings, displayed alongside a state-regulated sportsbook’s odds for the same game, “nearly mirror each other.” Kalshi first filed a self-certification to trade sports event contracts on January 22, 2025, the opinion states.

A three-part holding under IGRA

The panel held the tribes demonstrated a likelihood of success on three elements of their IGRA claim. First, the court concluded the sports event contracts constitute class III gaming under IGRA’s residual definition of “all forms of gaming that are not class I gaming or class II gaming,” reinforced by National Indian Gaming Commission regulations that include sports betting in class III. “The similarities between a sports event contract, which even Kalshi calls ‘sports betting,’ and a traditional sports wager are overwhelming,” the panel wrote, adding that “the only thing that changes is Kalshi’s vocabulary.”

Second, the panel held the contracts are “located on Indian lands” when a user enters into them from tribal territory, reasoning that the act of placing a wager occurs where the bettor is located even if the operator’s servers sit elsewhere. Third, the panel found Kalshi’s offerings violate the tribes’ 2024 secretarial procedures — rules prescribed by the Secretary of the Interior after compact negotiations with California failed — which treat class III gaming as lawful only when tribally authorized and conducted through the tribal regulatory structure. Because those procedures incorporate the tribes’ gaming ordinances, which prohibit gaming not expressly authorized, the panel held the contracts also violate the compact-equivalent regime.

Statutory defenses rejected

The court rejected Kalshi’s argument that the Unlawful Internet Gambling Enforcement Act (UIGEA), which carves CFTC-registered-entity transactions out of its definition of “bet or wager,” displaces IGRA. The panel noted UIGEA expressly disavows any intent to alter or supersede IGRA proceedings related to Indian lands, concluding that “IGRA provides a cause of action to enjoin class III gaming activities conducted improperly and at least in part on Indian lands, while UIGEA governs payments connected to unlawful internet gambling.”

The panel also rejected the argument that the Commodity Exchange Act’s grant of “exclusive jurisdiction” to the CFTC bars the IGRA claim. Citing its recent decision in KalshiEX v. Assad — which held Kalshi’s sports event contracts are likely not swaps under the CEA — the court held the two statutes address different questions: the CEA governs covered derivatives trading on designated contract markets, while IGRA governs class III gaming activity on Indian lands. The opinion situates the dispute among a split of other rulings, including the Third Circuit’s Flaherty decision holding the CEA preempts state gaming regulations and the Sixth Circuit’s Schuler order declining to enjoin Ohio’s regulator, while noting that none of those cases involved event contracts on tribal lands.

What the ruling does — and does not — do

The panel affirmed the district court’s rejection of the tribes’ Lanham Act claim over Kalshi’s advertising that “Sports Betting [Is] Legal in all 50 States on Kalshi,” holding the statement was a nonactionable lay opinion about legality given that the legal status of the products remains unsettled across courts.

Critically, the ruling does not itself enjoin Kalshi. The panel addressed only the likelihood-of-success factor — which it called the most significant of the Winter preliminary-injunction factors — and remanded the case to the district court to weigh the remaining factors: irreparable harm, the balance of equities, and the public interest. No injunction has issued, and the decision does not resolve the underlying merits of the case.

Amicus briefs in the appeal were filed by tribal gaming organizations including the Indian Gaming Association and the National Congress of American Indians, the American Gaming Association, and a coalition of attorneys general from Massachusetts, California, 25 other states, and the District of Columbia, according to the opinion’s counsel listing.

Reactions from both sides

Indian Gaming Association Chairman David Z. Bean framed the outcome in those terms, calling the decision “an important victory for Tribal sovereignty, for the Indian Gaming Regulatory Act, and for every Tribal Nation that has fought to protect the integrity of Indian gaming.” Bean said the ruling “reinforces a fundamental principle: when sports wagering occurs on Indian lands, federal Indian gaming law matters,” and reiterated the association’s position that prediction-market platforms “should not be permitted to use the Commodity Exchange Act or CFTC oversight as a pathway around IGRA.”

Kalshi indicated it intends to fight on. “We’re reviewing all of our options to address this decision, including appeal,” spokesperson Elisabeth Diana told Sports Betting Dime. “This ruling is hard to square with other federal laws, which leave regulation of on-exchange derivatives trades exclusively to the CFTC.”

The case now returns to the Northern District of California, where Judge Corley is instructed to evaluate the remaining preliminary-injunction factors on the tribes’ IGRA claim. Any injunction, if granted, would apply to the offering of sports event contracts to users located on the tribes’ lands; the panel’s ruling leaves the broader national questions about sports event contracts — which remain divided among federal courts — for other proceedings.