Three tribes in California are pushing back against Kalshi, a company that operates sports event contracts, arguing that these contracts violate tribal gaming laws. This legal battle has reached the Ninth Circuit Court, where the tribes seek to overturn a prior ruling that allowed Kalshi to continue its operations on tribal lands.
The appeal, filed by the Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians, stems from a lower court's decision not to grant a preliminary injunction against Kalshi and its partner Robinhood. The tribes contend that these contracts represent unauthorized Class III gaming on their lands, which should comply with their regulatory frameworks.
Attorney Lester Marston, representing the tribes, emphasized that the gaming ordinances in place cannot be separated from the agreements made with the federal government. Marston argued that if Kalshi is allowed to operate without adhering to these regulations, it sets a dangerous precedent where outside companies can bypass tribal authority.
In response, Kalshi's legal representative, Grant Mainland, insisted that the language of the agreements governs only what the tribes can offer and does not pertain to independent federally regulated exchanges like Kalshi. He pointed out that the Indian Gaming Regulatory Act (IGRA) has not previously been applied in this way against a private entity not involved in tribal agreements.
This legal dispute follows a November ruling by US District Judge Jacqueline Scott Corley, who found that the Secretarial Procedures are comparable to compacts under IGRA but ultimately concluded that Kalshi's actions did not violate tribal laws. Judge Corley noted that the provisions addressed online games offered by tribes but did not mention companies such as Kalshi, thus ruling in favor of Kalshi's right to operate.
Judge Corley also stated that the Unlawful Internet Gambling Enforcement Act (UIGEA) applies to these transactions, as its definition of a “bet or wager” does not cover transactions conducted by entities registered under the Commodity Exchange Act. Kalshi falls under this exclusion, allowing it to continue its operations for now.
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