Ninth Circuit Reviews Tribal Appeal Against Kalshi

The U.S. Court of Appeals for the Ninth Circuit has heard oral arguments in a very closely watched appeal that could have significant implications for the future of prediction markets and tribal gaming.

The case was brought by Blue Lake Rancheria, Chicken Ranch Rancheria of Me Wuk Indians, and Picayune Rancheria of Chukchansi Indians, which are seeking to overturn an earlier ruling that dismissed their claims against Kalshi. The tribes argue that Kalshi's sports event contracts amount to illegal sports betting on tribal lands and are interfering with their exclusive gaming rights under the Indian Gaming Regulatory Act (IGRA).

Judges Focus on the Nature of Sports Contracts

During the hearing, members of the Ninth Circuit questioned both sides about whether Kalshi's sports event contracts are meaningfully different from traditional sports betting.

According to reports from the hearing, one judge said that the contracts "sound like a bet," highlighting the central question at the heart of the case. Kalshi, however, stated that its products are federally regulated derivatives that are overseen by the Commodity Futures Trading Commission (CFTC) rather than gambling products governed by state or tribal gaming laws.

The judges did not issue a ruling from the bench, with a written decision expected at a later date.

Tribes Challenge Earlier Court Decision

The appeal follows a federal district court ruling that dismissed the tribes' claims last year. That court concluded the Commodity Exchange Act (CEA) pre empted the tribes' arguments under both state law and IGRA. The tribes are now asking the Ninth Circuit to reverse that decision and allow the case to move forward.

The outcome could help clarify how federal commodities law interacts with tribal gaming rights when it comes to sports based event contracts.

Another Closely Watched Prediction Market Case

The appeal is one of several major legal cases involving Kalshi across the United States. The company is currently defending lawsuits and regulatory action in multiple states, including New York, Nevada, Washington, Michigan, and Massachusetts, as courts continue to examine whether sports event contracts should be treated as financial products or sports betting.

The California appeal adds another element to that debate because it also raises questions about tribal sovereignty and the protections provided under federal gaming law.

Decision Could Shape Future Cases

While no timeline has been set for a ruling, the Ninth Circuit's decision is expected to be closely watched by prediction market operators, tribal gaming groups and regulators.

A decision in favour of the tribes could revive the case and strengthen challenges to sports event contracts in other jurisdictions. A ruling backing Kalshi, meanwhile, would reinforce the company's position that its products fall under federal oversight.

Whatever the outcome, the case is likely to become another important milestone as courts continue defining how prediction markets fit within the U.S. legal and regulatory landscape.

Stay tuned to UMG Gaming for more updates on prediction markets, sports betting and the latest legal developments across the United States.