Court Blocks Kalshi's Sports Bets on Tribal Lands

A federal appeals court has issued a significant ruling, blocking Kalshi from offering sports event contracts on the lands of two California tribes: Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians. The 9th U.S. Circuit Court of Appeals determined that the tribes would likely succeed in proving that Kalshi's contracts violated the federal Indian Gaming Regulatory Act and their own gaming ordinances.

This decision, handed down on September 16, 2026, is the second legal blow to Kalshi in recent weeks, following a August 28, 2026, ruling subjecting it to Nevada gaming regulators. The court's decision reinforces the legal challenges prediction market operators face regarding whether such platforms should be regulated as gambling or financial markets. Robinhood Markets, a notable supporter of Kalshi, indicated it would be evaluating its legal options following the ruling.

Circuit Judge Margaret McKeown stated that each Kalshi contract constituted a "bet or wager," which was not explicitly authorized by federal law or the tribes' ordinances. The court rejected Kalshi's argument that federal laws governing internet gambling superseded the Indian Gaming Regulatory Act. A coalition of 27 states and Washington, D.C., supported the tribes' appeal, asserting that a ruling for Kalshi would undermine state authority over illegal gambling.

Kalshi, known for sports wagers, also allows betting on elections, economics, and weather. The broader debate over the regulation of prediction markets is expected to reach the U.S. Supreme Court, with Robinhood advocating for such intervention. The Commodity Futures Trading Commission (CFTC) claims exclusive oversight, but this is contested by many states.