The Ninth Circuit’s second ruling against Kalshi in a week is not a rerun of the first. It hands the Supreme Court a different case to decide — one in which the question is not only whether the Commodity Exchange Act preempts state gambling law, but whether it overrides a tribe’s authority over betting conducted on its own land.
The decision is Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians v. Kalshi, from a panel of Judges M. Margaret McKeown, Mary Murguia and Richard Paez. It partially reverses U.S. District Judge Jacqueline Scott Corley’s refusal to enjoin Kalshi’s sports event contracts, and holds that those contracts fall inside the class III gaming framework of the Indian Gaming Regulatory Act. Kalshi’s own filings describe the products as swaps, a category that federal law defines by reference to an uncertain future event.
What the panel actually decided
Three moves did the work. First, IGRA does not care what an operator calls the product — it looks at what the activity looks like. National Indian Gaming Commission regulations place “any sports betting and parimutuel wagering” in class III, and Kalshi offers bets on point spreads, game totals and player propositions, so the panel found “overwhelming” similarities to a traditional wager. Second, Kalshi’s argument that the Unlawful Internet Gambling Enforcement Act displaces IGRA failed, because UIGEA explicitly disavows changing federal, state or tribal gaming regulation. Third, the CEA’s grant of jurisdiction over swaps does not help Kalshi, because the panel had already held in Kalshi v. Assad that these contracts likely fall outside the category of swaps entitled to preemptive effect.
The panel also rejected the claim that the tribes’ only remedy was a breach-of-contract suit. An injunction, McKeown wrote, is “squarely within the ambit” of IGRA.
Why the second ruling is the more interesting one
Six Ninth Circuit judges have now ruled against Kalshi across the two cases — Trump appointees alongside Clinton and Obama appointees — while the Third Circuit held in April that these contracts are swaps and that CFTC authority preempts state law. The Supreme Court is currently weighing whether to take the Third Circuit case, Kalshi v. Flaherty; Kalshi files its response next month.
Blue Lake Rancheria may be the cleaner vehicle. It assembles IGRA, UIGEA and the CEA in one dispute, adds tribal sovereignty to the mix, and lands in front of a Court that has decided significant federal Indian law cases in recent terms — with at least one justice who writes about tribal sovereignty with some frequency. There is also a deference question. The CFTC has moved toward supporting sports prediction markets, but after the Court’s 2024 decision ending Chevron deference, an agency’s reading of an ambiguous statute does not settle what the statute means. Michael McCann, writing in Sportico, calls the odds of the Court taking up the subject higher than the roughly 1 percent baseline. That is a legal analyst’s read, not a ruling.
Nothing has been decided. The panel reversed a denial of a preliminary injunction and sent the case back for the district court to weigh the remaining factors — irreparable harm, the balance of equities, the public interest — before any injunction issues.
Who bears the cost of the answer
IGRA exists so tribes can regulate gaming on their own land; the panel noted that class III gaming has become “the lifeblood on which many tribes have come to rely.” California is one of eleven states that do not permit legal sports betting, and the tribes’ position is that betting inside a reservation is theirs to authorise or refuse. If a federal registration is enough to place a product beyond every state and tribal gaming statute, the compacts that set the terms — and the revenue that funds tribal services — are the things displaced. The Court has not agreed to hear any of this yet.