On November 4, 2026, U.S. District Judge Jacqueline Scott Corley of the Northern District of California issued a preliminary injunction barring Kalshi Inc. and KalshiEX from offering sports event contracts on the lands of two tribes. The order, limited to two rancherias, turns a voluntary restriction into a court obligation and raises a central question: can a derivatives contract escape tribal gaming law?
🔑 Key takeaways
- The November 4, 2026 injunction covers the lands of Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, not all of California.
- On September 16, 2026, the Ninth Circuit found the tribes likely to succeed on their claim that Kalshi’s sports contracts are Class III gaming under IGRA.
- Tribes must submit boundary maps by November 13, and Kalshi must report its compliance measures within 21 days.
- Litigation is widening with suits in Arkansas and Utah, while appellate courts remain split.
A narrow injunction with binding force
The order does not extend to the whole of California. It applies only to the lands of Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, the two plaintiff tribes. It covers every sports contract that “facially involve, relate to, or reference” baseball, tennis, pickleball, soccer, basketball, football, golf, chess, esports, hockey, motorsports, boxing, wrestling and the Ultimate Fighting Championship.
The order sets no delayed start date and mandates no geofencing technology. It converts into a judicial obligation a step Kalshi had presented as voluntary. In a joint report on October 14, the company said it had worked with GeoComply to block sports transactions from tribal lands and argued that an injunction was unnecessary. The tribes challenged how effective those blocks were and asked for an enforceable order.
The two tribes filed suit in July 2025. They argued that the contracts amounted to unauthorized Class III gaming under the Indian Gaming Regulatory Act (IGRA) and violated their gaming ordinances. According to Buchalter, the original complaint also named Robinhood, described as a retail distributor of Kalshi’s contracts.
In November 2025, Corley had denied the preliminary injunction on three grounds: the transactions did not occur on tribal land; the Unlawful Internet Gambling Enforcement Act (UIGEA), not IGRA, governed the situation; and the Commodity Exchange Act (CEA) placed the contracts outside the UIGEA. The Ninth Circuit rejected much of that reasoning.
Substance over labels
On September 16, 2026, a unanimous Ninth Circuit panel of Chief Judge Mary H. Murguia and Judges M. Margaret McKeown and Richard A. Paez partially reversed that denial. Judge McKeown, who wrote the opinion, found the tribes likely to prevail on their IGRA claim and their gaming ordinances. The panel remanded the case so Corley could weigh irreparable harm, the balance of hardships and the public interest. It did, however, uphold the rejection of the tribes’ false advertising claim under the Lanham Act. According to Buchalter, it was the first circuit-level ruling to examine prediction markets from a tribal perspective.
The court conducted a functional analysis and declined to be swayed by Kalshi’s labels. IGRA classifies as Class III any gaming that is neither Class I nor Class II, and National Indian Gaming Commission regulations refer to “any sports betting”. Kalshi offers point spreads, over/under totals, player props and parlays, which it calls “combos”. Its contracts pay out if the selected event occurs and become worthless otherwise, a mechanism the court viewed as identical to a bet.
“The substance of the sports event contracts offered on Kalshi’s designated contract market is sports gambling, regardless of whether Kalshi calls them swaps.”
Judge M. Margaret McKeown, Ninth Circuit
To illustrate the point, McKeown imagined a bettor at the Blue Lake Casino Hotel comparing Kalshi with DraftKings. The bettor, the place, the stake and the contingency stay the same; only the vocabulary changes. The opinion concludes that “Kalshi may reshuffle the cards, but it cannot change the hand.”
IGRA versus the CEA: a two-front fight
Neither the UIGEA nor the Commodity Exchange Act displaces IGRA. The UIGEA excludes certain transactions on platforms registered with the CFTC from its definition of “bet or wager”, but states that it does not intend to alter federal, state or tribal gaming regulations. Exclusive CFTC jurisdiction centralizes federal oversight without creating, in the court’s view, a “roving exemption from every other federal statute that may apply to the same conduct for a different reason”.
The panel also rejected the argument that the contract was executed in New York or off-reservation. For gambling purposes, the relevant location is where the bettor sits. Relying on California v. Iipay Nation of Santa Ysabel, it held that buying a contract from a reservation constitutes gaming on tribal land, even if Kalshi’s servers and headquarters are elsewhere. IGRA requires only that part of the gaming activity take place there.
| Issue | Kalshi’s position | Panel’s holding |
|---|---|---|
| Place of gaming | Off-reservation execution | Where the bettor is located |
| Nature of contracts | Swaps governed by the CEA | Sports betting under IGRA |
| Applicable law | UIGEA or CEA | IGRA not displaced |
| Party targeted | Compact signatory | The activity, including by a non-signatory |
On August 28, in KalshiEX v. Assad, the Ninth Circuit had already found that these contracts were probably not swaps under the CEA. Jurist summarizes that decision as holding that CEA jurisdiction did not extend to the contracts. Buchalter and Blank Rome note instead that IGRA was not displaced even if the contracts were classified as swaps. The conclusion therefore holds under either reading.
California’s framework keeps sports betting illegal
Sports betting is prohibited under Cal. Penal Code § 337a(a)(6). In November 2022, voters rejected Proposition 26, which would have legalized in-person sports betting at tribal casinos and licensed racetracks, and Proposition 27, which would have legalized online sports betting statewide. Tribes hold the exclusive right to regulate Class III gaming. After the Ninth Circuit found in 2022 that California had not negotiated successor compacts in good faith, the Interior Department issued secretarial procedures to both tribes in 2024.
Sources do not describe the status of sports betting in identical terms. Jurist says it is legal only on tribal lands, while Buchalter notes that it “remains illegal in California”. In both readings, tribal authority does not authorize Kalshi’s contracts. Tribes have used gaming to fund their governments since the 1970s. After California v. Cabazon Band of Mission Indians in 1987, Congress passed IGRA in 1988 to promote economic development, self-sufficiency and tribal governments.
- Tribal gaming revenue in 2024: $43.9 billion.
- Share of Kalshi’s trading volume tied to sports, according to data cited by the court: up to 90%.
- Coalition supporting the tribes: 27 state attorneys general, plus the District of Columbia, led by Massachusetts and California.
The false advertising claim failed because the legality of the contracts remained uncertain. The message “Sports Betting [Is] Legal in all 50 States on Kalshi” was treated as lay opinion rather than a verifiable fact. The court did not endorse it, observing that Kalshi “studiously wraps its product in the language of derivatives” while “its advertising is less coy”.
Outlook and scenarios
The injunction sets no start date and no technical solution, which leaves real uncertainty over implementation. Three scenarios stand out in the near term. The first is rapid compliance through verifiable geofencing, which would shrink tribal-land volume without touching the rest of the country. The second is further appeal: Kalshi has sought en banc rehearing of Assad, and New Jersey has asked the Supreme Court to review Flaherty. The third is a persistent circuit split. The Third Circuit held in Flaherty that the CEA displaced New Jersey’s gaming laws, while the Tenth Circuit, in Comanche Nation v. Ware in 2026, backed a tribe’s power to act against third parties.
Litigation is expanding at the same time. On November 4, Arkansas Attorney General Tim Griffin sued Kalshi over the alleged operation of an illegal gambling platform. The week before, Utah had brought criminal charges against Kalshi and two executives, along with a civil complaint against Kalshi and two trading firms, including Susquehanna. In the opposite direction, on November 3 the Second Circuit denied Kalshi provisional protection against state enforcement, though it did not bar trading. No reporting shows a measurable change in Kalshi’s trading volume or liquidity since the November 4 order.
Sources
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