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A federal judge has rejected a bid by three California tribes to stop prediction market operator Kalshi from offering sports-related event contracts on tribal lands, marking an early setback in the ongoing legal dispute over whether such markets fall under federal or tribal gaming law.
Kalshi Cleared as Judge Cites Federal Oversight
On November 10, Judge Jacqueline Scott Corley (Northern District of California) denied the tribes’ request for a preliminary injunction. The Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians argued that Kalshi’s contracts amounted to illegal Class III gaming under the Indian Gaming Regulatory Act (IGRA). They also accused Kalshi of misleading advertising by calling sports betting legal everywhere, which they said violated the Lanham Act.
Judge Corley ruled that the tribes had not demonstrated a likelihood of success on either claim. Regarding the advertising argument, she noted that Kalshi’s claim that “sports betting is legal in all 50 states” could be interpreted as an opinion rather than a factual statement, making it difficult to pursue under the Lanham Act.
The IGRA claim got a deeper look. Corley pointed to the Unlawful Internet Gambling Enforcement Act (UIGEA), which covers online gambling that crosses state and tribal borders. But she also highlighted that the Commodity Exchange Act (CEA) governs Kalshi’s contracts, putting the company under the watch of the Commodity Futures Trading Commission (CFTC). That federal oversight, the judge said, means current gambling laws don’t bar what Kalshi’s doing.
Tension Between Federal Regulation and Tribal Sovereignty
While the ruling favors Kalshi, Judge Corley acknowledged the tribes’ broader concerns. She recognized that Kalshi’s self-certification of event contracts under the CEA may bypass interstate gambling restrictions designed to protect tribal sovereignty. Nevertheless, she concluded that policy or ethical concerns could not override the court’s legal authority.
Legal experts suggest that the ruling was expected, given the complex jurisdictional questions surrounding online prediction markets. They note that the case illustrates how internet-based speculation is stretching the boundaries between regulated financial products and traditional gambling. For now, Kalshi keeps its doors open while the broader lawsuit moves forward in federal court.
Kalshi said it was pleased with the decision, stressing that it follows federal rules and isn’t just another casino. The tribes aren’t backing down, though—they plan to keep fighting as the case continues.
Source: Gambling News
