Ninth Circuit Appeals Court Reverses Denial of Blue Lake Rancheria Tribe’s Preliminary Injunction Request Against Kalshi

• The Ninth Circuit today reversed a denial of the Blue Lake Rancheria Tribe’s request for a preliminary injunction against Kalshi
• The three-judge panel reversed the district court’s denial of a preliminary injunction in part
• Panel holds the tribes were likely to succeed in claims that Kalshi’s sports event contracts on tribal lands violated IGRA

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A three-judge panel for the U.S. Court of Appeals for the Ninth Circuit today reversed in part the U.S. District Court of Northern District of California’s denial of a preliminary injunction motion from the Blue Lake Rancheria Tribe against prediction market operator Kalshi.

The panel affirmed in part and reversed in part the district court’s order denying a motion for a preliminary injunction filed by Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, both California tribes. The panel reported the tribes were likely to succeed in claims that Kalshi’s sports event contracts on tribal lands violated the Indian Gaming Regulatory Act (IGRA) and tribal gaming ordinances.

“Because the panel concluded that the tribes were likely to prevail on their claims under IGRA, it remanded as to that claim with instructions to reach the remaining factors for evaluating the tribes’ motion for a preliminary injunction,” the panel reported.

Sports Event Contracts Are Likely Class III Gaming Activities

To demonstrate a likelihood of success on their IGRA claims, tribes have to demonstrate that Kalshi’s sports event contracts constitute Class III gaming activities and the contracts are located on Indian lands.

The panel noted that in its view the sports event contracts do indeed constitute Class III gaming.

“In practice, what Kalshi labels ‘sports event contracts’ neatly track the activities described in IGRA and its implementing regulations. The similarities between a sports event contract, which even Kalshi calls ‘sports betting,’ and a traditional sports wager are overwhelming,” they wrote.

The Ninth Circuit’s conclusion is reinforced by the Department of Interior’s compact review regulation, the judges noted, which defines gaming activity as “the conduct of Class III gaming involving the three required elements of chance, consideration, and prize or reward.”

Secondly, the judge panel concluded the tribes did indeed prove the contracts were “located on Indian lands” as users entered into the contracts from tribal territory.

“Third, the tribes demonstrated that Kalshi was offering the contracts in violation of the tribes’ secretarial procedures, which treat class III gaming as lawful only when tribally authorized and conducted through the tribal regulatory structure. Because the secretarial procedures in this case depended on and incorporated the tribes’ ordinances, and Kalshi’s sports event contracts were not authorized by those ordinances, Kalshi’s contracts were also in violation of the compact between the tribes and the State of California,” they noted.

A Kalshi spokesperson told Sports Betting Dime the prediction market company is exploring its options.

“We’re reviewing all of our options to address this decision, including appeal. This ruling is hard to square with other federal laws, which leave regulation of on-exchange derivatives trades exclusively to the CFTC,” Elisabeth Diana, Kalshi spokesperson, told Sports Betting Dime.

Lawsuit Filed in July 2025

The tribes filed their lawsuit on July 22, 2025, against Kalshi in U.S. District Court of Northern District of California seeking a preliminary and permanent injunction against the prediction market operator to prevent them “from engaging in illegal sports gambling on the tribes’ respective reservations in direct violation of the Indian Gaming Regulatory Act.”

The lawsuit contends that both Kalshi and Robinhood’s conduct in California is unlawful class III gaming activity in violation of 18 U.S.C. § 1166, which governs illegal gambling in Indian country, and is therefore subject to injunctive relief under the Indian Gaming Regulatory Act (IGRA).

Judge Jacqueline Scott Corley denied the tribal motion for a preliminary injunction in November 2025, which prompted the tribes to appeal the court’s decision with the 9th Circuit Court of Appeals.

A three-judge panel for the circuit court held a hearing on July 10, 2026, and listened to arguments from Kalshi and the tribes.

Two Tribes Remain in Lawsuit

Originally, the Picayune Rancheria of the Chukchansi Indians, Blue Lake Rancheria, and Chicken Ranch Rancheria of Me-Wuk Indians filed a lawsuit for injunctive relief and fiscal damages against Kalshi, alleging the prediction market company engaged in illegal gaming on tribal land.

This past August, the Picayune Rancheria of the Chukchansi Indians removed themselves from the proceedings.