Kalshi may have secured its biggest win yet in its fight to offer predictions around the country.
In what may be considered a needed reprieve from recent attorney general opinions, proposed bills and court decisions against its favor, Kalshi scored a major victory with the United States District Court Northern District of California’s order denying California tribes’ motion to prohibit the platform from operating on tribal lands.
The motion – filed by Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians (collectively, the “Tribes”) in support of their complaint seeking declaratory and injunctive relief and money damages against Kalshi and Robinhood for alleged violations of the Indian Gaming Regulatory Act (IGRA) and Lanham Act – sought to enjoin Kalshi from each of the following acts:
- Offering on the Tribes’ Indian lands contracts that take the form of a binary ‘yes/no’ event contract that post the following questions: (i) ‘Will <team> win <title>?’, and (ii) ‘Will <team> win <event>?’
- Marketing its sports contracts as ‘legal in all 50 states’ or any variation of that phrase or similar representation regarding the nationwide legality of these gaming contracts.
The court denied the Tribes’ motion due to their failure to show a likelihood of success regarding either claim.
IGRA claim fails
The Tribes’ IGRA claim stems from its assertion that Kalshi’s offering of sports-related event contracts undermines the Tribes’ exclusive authority to offer Class III gaming (i.e. Nevada-style casino gaming, including, slots, card games, and sports betting) in accordance with a Tribal-State compact. Based thereon, the court determined that it had jurisdiction over the Tribes’ IGRA claim “only if Plaintiffs are seeking to enjoin ‘class III gaming activity located on Indian lands and conducted in violation of any Tribal-State compact that is in effect.”
The Tribes failed to meet their burden of demonstrating likelihood of success that Kalshi’s offering of sports-related event contracts constituting Class III gaming in violation of IGRA, because the Picayune Rancheria’s Tribal-State compact and Blue Lake’s and Chicken Ranch’s secretarial procedures governing tribal gaming are “silent about what companies like [Kalshi] can do on the internet, and only outlines what the Tribe is ‘authorized and permitted to operate.’”
In other words, because IGRA specifically governs internet gaming as offered by the Tribes but no other party, the Court did not have the ability to enjoin Kalshi’s operations solely based on the language of the statute.
UIGEA governs Kalshi’s event contracts
The court additionally held that the Tribes were unlikely to succeed on the merits of its IGRA claim because the Unlawful Internet Gambling Enforcement Act, and not IGRA, applies to Kalshi’s operations.
UIGEA defines “unlawful internet gambling” as “to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.”
Notably, UIGEA specifically states that the term “bet or wager” does not include, among other things, “any transaction conducted on or subject to the rules of a registered entity or exempt board of trade under the Commodity Exchange Act.” In their motion, the Tribes did not challenge Kalshi’s status as a registered entity under the Commodity Exchange Act (CEA) or that the buying and selling of sports-related event contracts were not “transactions conducted on” Kalshi’s marketplace.
In determining that IGRA and the UIGEA are co-existing statutes for the purpose of covering (1) Class III gaming activities that take place intrastate, i.e. exclusively withing Tribal lands (IGRA) and (2) interstate (or state-to-Indian-lands or vice versa) gaming via the internet (UIGEA), respectively, the Court held the following:
“Since it is undisputed Kalshi is a registered entity under the Commodity Exchange Act, and that its transactions are conducted on the Kalshi internet site, its internet contracts are not bets or wagers under the UIGEA and therefore do not constitute ‘unlawful internet gambling’ even if the contracts are received, placed or transmitted from persons on Indian lands where internet gambling is illegal.”
California ignores ‘swaps’ debate
California’s order arrived shortly after the US District Court for the District of Nevada’s denial of Crypto.com’s motion for preliminary injunction on the basis that its sports-related event contracts are not swaps.
Though the Tribes filed a notice of supplemental authority in support of its motion citing to the Nevada court’s most recent decision, the Northern District of California did not consider the “swaps vs. sports-related event contract” analysis because it was not originally raised in the parties’ initial briefs.
However, the court reserved the right for the Tribes to bring the issue again in responding to Kalshi’s pending motion to dismiss the Tribes’ complaint, which hearing is currently scheduled for March 19, 2026.
Another Kalshi case referenced
Notwithstanding, the order does make reference to a prior Nevada ruling (Kalshi v. Hendrix) for the purpose of inferring that any court’s determination regarding the outright permissibility of event contracts offered by a designated contract maker (DCM) may be considered judicial overreach based on the CEA providing the CFTC with exclusive authority to determine whether such event contract violates the CEA, stating:
“[W]hile Plaintiffs argue the event contracts are presumptively unlawful under the Act, ‘presumption’ and any variation of that word are absent from the Commodity Exchange Act, its special rule for event contracts, or Commission regulations for self-certification.… The Commodity Exchange Act’s special rule provides ‘the Commission may determine’ event contracts are ‘contrary to the public interest.’ … Congress did not say courts could so determine or that the Commission must make a presumption. Rather, the only enforcement mechanism belongs to the Commission, which ‘may determine’ that an event contract ‘be subject to a 90-day review’ period during which the contract listing is suspended pending a final determination.
“To the extent the States or other interested parties object to Kalshi offering sports … event contracts, they must take that up with the [Commodity Futures Trading Commission] and Congress. Such policy issues are beyond the jurisdiction of this court.” Hendrick, 2025 WL 1073495 at *8.
Lanham Act claim also unlikely to Succeed
As for the Tribes’ Lanham Act claim, the court stated that Kalshi’s advertisements in question: (1) merely stated an opinion its product is legal, which opinion has been supported by multiple courts and therefore cannot be proven as “literally or facially false”, and (2) did not support a showing of “competitive injury” needed to support the Tribes’ claim.
