A federal judge has turned down three California tribes’ effort to prevent prediction market operator Kalshi from offering sports-related event contracts on tribal lands. This decision is an early blow to the tribes in their ongoing legal battle over whether such markets are allowed under federal and tribal law.
Kalshi Cleared to Continue Sports Contracts as Judge Cites Federal Oversight
On November 10, Judge Jacqueline Scott Corley of the US District Court for the Northern District of California turned down a request from three Native American tribes. The Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians had asked for a preliminary injunction against Kalshi. These tribes claimed that Kalshi’s sports event contracts were illegal Class III gaming under the Indian Gaming Regulatory Act (IGRA). They also said that Kalshi’s marketing wrongly showed these activities as legal across the country, breaking the Lanham Act.
Judge Corley decided that the tribes did not show they were likely to win on either claim. About the advertising issue, she thought that Kalshi’s statement “sports betting is legal in all 50 states” could be seen as an opinion rather than a fact. This makes it hard to go after under the Lanham Act.
Her breakdown of the IGRA claim was more intricate. Corley highlighted the Unlawful Internet Gambling Enforcement Act (UIGEA), stating that it controls online gambling activities that go beyond state and tribal borders. She stressed that UIGEA has clear exceptions for contracts under the Commodity Exchange Act (CEA), which covers Kalshi’s operations with the Commodity Futures Trading Commission (CFTC) keeping an eye on things. This regulatory setup led the court to decide that existing gambling laws did not ban Kalshi’s contracts.
Ruling Highlights Tension Between Federal Regulation and Tribal Gaming Rights
Although Judge Corley sided with Kalshi on the injunction, she recognized the tribes’ wider worries. She pointed out that Kalshi’s self-certification of its event contracts under the CEA might have sidestepped traditional interstate gambling restrictions, rules created to protect tribal interests and sovereignty. Still, the judge decided that moral or policy concerns could not override the legal limits of her authority.
Legal experts said the ruling was not a surprise, given the tricky jurisdiction issues around online prediction markets. They stated that the case shows how new forms of internet-based speculation are pushing the limits between regulated financial products and regular gambling. The ruling lets Kalshi keep running while the bigger lawsuit goes on.
The company put out a statement saying they are happy with the decision. They made it clear that their exchange, which follows federal rules, is different from casino gambling. At the same time, the tribes are going to keep pushing their case as it moves forward in federal court.