Sports betting is illegal in California outside tribal casinos. The Ninth Circuit’s answer, in an opinion filed 16 September, is that buying a Kalshi contract on the Giants from inside a reservation is that same illegal bet wearing a different label.
The case is Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians v. Kalshi, Inc., No. 25-7504. Kalshi is a derivatives exchange licensed by the Commodity Futures Trading Commission; Robinhood distributes its products. The tribes sued under the Indian Gaming Regulatory Act and the Lanham Act after the district court refused to block the contracts.
A unanimous three-judge panel — Chief Judge Mary Murguia, Judge M. Margaret McKeown writing, and Judge Richard Paez — reversed on the IGRA claim and affirmed on the Lanham claim. The reasoning is narrow and mechanical, which is what makes it consequential.
What the court decided
Three findings did the work. First, the contracts are Class III gaming under IGRA. Second, they are “located on Indian lands,” because the customer enters into the contract from tribal territory — where the transaction happens, not where the matching engine sits. Third, offering them there violates the tribes’ secretarial procedures and their compact with California, which allow Class III gaming only when the tribe authorises it and runs it through its own regulatory structure. Kalshi’s contracts are not authorised by the tribes’ ordinances.
The panel declined to let the Commodity Exchange Act displace any of it. The CEA gives the CFTC jurisdiction over covered derivatives traded on designated contract markets; IGRA governs Class III gaming on Indian lands. Two statutes, two different questions. Regulation by one expert agency does not create “a roving exemption from every other federal statute,” the panel wrote — quoting its own 28 August decision, which rejected the idea that Congress took “a wrecking ball to all sports gambling regulations built up over decades by federal, state, and tribal governments.”
On the marketing claim, the tribes lost. Kalshi’s advertisement that “Sports Betting [Is] Legal in all 50 States on Kalshi” is, in the panel’s view, a layperson’s opinion about a contested legal question rather than a false statement of fact — and since the legality of these products remains unsettled, a Lanham Act claim cannot rest on it. That holding is the one piece of the district court’s ruling the panel left standing: the ad, so far, is not itself actionable.
Why it matters beyond California
The ruling reaches the industry’s core claim — that a federally regulated event contract is a financial product wherever it is bought, and therefore outside state and tribal gaming law. The panel’s answer is functional rather than formal: what the product does decides what it is. It noted that Kalshi itself calls the transactions “sports betting,” and that the “similarities between a sports event contract … and a traditional sports wager are overwhelming.” The customer pays to take a position on an uncertain sporting outcome and is paid if it lands.
The cost of the opposite holding would fall on tribal governments that use gaming revenue to fund their own services, and on the state-tribal compacts that set the terms. Twenty-six states and the District of Columbia, a long list of tribal gaming associations and the American Gaming Association all filed briefs in the appeal — a sign of how much rides on which regulator, if any, controls this market.
It is also another data point in a genuine appellate split. The Third Circuit held in April that these contracts are swaps and that the CFTC’s authority preempts state gambling law; the Ninth Circuit has now twice disagreed. New Jersey has asked the Supreme Court to resolve it.
What the order does not do is stop Kalshi. The panel reversed the denial of a preliminary injunction and remanded for the district court to weigh the remaining Winter factors — irreparable harm, the balance of equities, the public interest — before deciding whether an injunction actually issues.