Securities Regulation Daily Wrap Up, FEDERAL PREEMPTION—9th Cir.: Ninth Circuit decides tribal groups can exclude Kalshi sports betting, (Sep 17, 2026)

By Lene Powell, J.D.

The court navigated a complex intersection of the Commodity Exchange Act and laws governing tribal and internet gambling.

Exclusive CFTC jurisdiction did not extend to sports-related event contracts offered by the Kalshi exchange within tribal lands, a Ninth Circuit panel ruled in an action by two California tribes. The panel found that the tribes were likely to succeed in their claims that Kalshi’s sports event contracts on tribal lands violated the Indian Gaming Regulatory Act (IGRA) and the tribes’ gaming ordinances. The panel reversed a denial of injunction and remanded for further proceedings (Blue Lake Rancheria v. Kalshi, Inc., No. 25-7504 (9th Cir. Sept. 16, 2026)).

The ruling followed similar reasoning as a recent Ninth Circuit decision that affirmed Nevada’s authority to regulate sports-related contracts on Kalshi and other prediction markets.

A Lanham Act claim regarding a Kalshi ad was found to be inactionable as an ambiguous statement of opinion.

District court denial of injunction. In a lawsuit in California federal district court, two federally-recognized tribes alleged that sports-related event contracts offered by Kalshi, a CFTC-regulated prediction market trading platform, and Robinhood, a retail distributor for Kalshi, are functionally sports bets and that the trading violated the IGRA because it was offered on tribal lands.

The district court denied the tribes’ motion for preliminary injunction, concluding that Kalshi is not bound by any tribal compact or procedure. The court reasoned that the challenged transactions do not occur on Indian lands; that the Unlawful Internet Gambling Enforcement Act (UIGEA) controls Kalshi’s conduct; and that the UIGEA does not govern Kalshi’s event contracts because those contracts are regulated by the Commodity Exchange Act (CEA).

The tribes filed an interlocutory appeal in the Ninth Circuit.

Violation of IGRA. A three-judge panel of the Ninth Circuit reversed the district court’s denial of injunction. First, the court found that the contracts violated the IGRA because they were “Class III gaming” on Indian lands and violated certain secretarial procedures.

In a threshold ruling, the court found that Secretary of the Interior procedures governing the tribes’ gaming were functionally equivalent to a compact with the state.

Next, the court found that Kalshi’s contracts are “Class III gaming” for purposes of the IGRA. The statute allows a tribe to enjoin “Class III gaming” on Indian lands if conducted in violation of a compact or secretarial procedures.

“The similarities between a sports event contract, which even Kalshi calls ‘sports betting,’ and a traditional sports wager are overwhelming,” the court wrote.

Similarities included:

• Kalshi users pay consideration to take a position, which turns on the uncertain outcome of a sporting event, and the user then receives a reward if the outcome occurs;

• Kalshi offers bets on point spreads, over/under game totals, and player propositions;

• Kalshi permits users to combine these wagers into parlays.

“Imagine a user standing on the floor of the Blue Lake Casino Hotel who downloads Kalshi and DraftKings, a classic online sports betting app. On Kalshi, she buys a $100 contract that pays if the San Francisco Giants win. On DraftKings, she wagers $100 on the same outcome. The bettor, the place, the stake, and the contingency remain the same,” the court stated. “The only thing that changes is Kalshi’s vocabulary.”

The court further found that the contracts were located on Indian lands and violated the secretarial procedures.

IGRA not displaced by UIGEA. Next, the court found that the IGRA was not displaced by the UIGEA as to event contracts. The court explained that a carveout for CFTC-regulated transactions from the definition of “bet or wager” would alter or limit the effects of the compact and procedures on the tribes’ land. The UIGEA thus curtailed its own applicability.

No CFTC exclusive jurisdiction for event contracts. The court next found that the CFTC’s exclusive jurisdiction did not extend to Kalshi’s event contracts.

The court pointed to its recent decision in KalshiEX v. Assad, which held that Kalshi’s sports event contracts are likely not swaps under the CEA, and as a result were not subject to the CFTC’s exclusive jurisdiction over swaps transactions.

But even if the contracts are swaps, the panel said it would be compelled to reverse because the jurisdictional provision is “not a broad grant to the Commission of control over all commodities-related matters to the exclusion of all other federal laws.” The CEA did not say clearly that it displaces other federal statutes, much less IGRA’s separate regulation of gambling on Indian lands—a subject on which Congress has spoken “repeatedly, deliberately, and specifically.”

Lanham Act. Finally, the panel affirmed the district court’s refusal to enjoin a Kalshi ad promoting “Sports Betting Legal in all 50 States on Kalshi.” The statement was an inactionable opinion because it was by a layperson and the legality of Kalshi’s product remains unsettled.

This is case No. 25-7504.

Attorneys: Lester John Marston (Rapport and Marston) for Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians. Grant R. Mainland (Milbank LLP) for Kalshi, Inc. and KalshiEX, LLC. Antony Ryan (Cravath, Swaine & Moore LLP) for Robinhood Markets, Inc. and Robinhood Derivatives, LLC.

Companies: Blue Lake Rancheria; Kalshi, Inc.; KalshiEX, LLC; Chicken Ranch Rancheria of Me-Wuk Indians, Robinhood Markets, Inc.

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