US appeals court blocks Kalshi from offering event contracts on Native American lands

It is also a defeat for electronic trading platform operator Robinhood Markets HOOD.O, which said it would lose substantial business if it couldn't route customers' event contract orders through Kalshi. Elisabeth Diana, a Kalshi spokesperson, said the company may appeal. “This ruling is hard to square with other federal laws, which leave regulation of on-exchange derivatives trades exclusively to the [Commodity Futures Trading Commission],” she said. A spokesperson for Robinhood said that company is evaluating its legal options. “Robinhood has great respect for Native American tribes and their sovereignty,” she added. A federal appeals court blocked Kalshi on Wednesday from offering sports event contracts on the lands of two California tribes, handing the largest U.S. prediction markets platform its second legal setback in less than a month. By a 3-0 vote, the 9th U.S. Circuit Court of Appeals in San Francisco said two federally recognized California tribes, Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, deserved a preliminary injunction because they would likely show that Kalshi's contracts violated the federal Indian Gaming Regulatory Act and the tribes' own gaming ordinances. On August 28, the same court said Kalshi was subject to oversight by Nevada gaming regulators. The decision adds to legal challenges facing prediction market operators, amid a nationwide dispute over whether platforms that let people wager on sports and other events should be regulated as gambling or as federally licensed financial markets. Though best known for allowing sports wagers, Kalshi's platform also lets people wager on elections, economics, the weather and cultural events. Many analysts expect the U.S. Supreme Court to eventually decide who should regulate prediction markets, and Robinhood has asked that it consider doing so. The CFTC, under Republican President Donald Trump, has claimed exclusive oversight, but many states disagree. A bipartisan coalition of 27 states and Washington, D.C. sided with the tribes' appeal, saying a ruling for Kalshi would undermine their longstanding authority to stop illegal gambling and address harms associated with legal gambling. The two tribes allowed gaming on their reservations under procedures prescribed by the U.S. Department of the Interior, but said no procedures or compacts let nontribal entities such as Kalshi do the same. Circuit Judge Margaret McKeown said a lower court judge erred in denying an injunction because each Kalshi event contract was “an act of placing a bet or wager,” which neither the Interior Secretary nor the tribes' gaming ordinances expressly authorized. She rejected Kalshi's claim that the Indian Gaming Regulatory Act was displaced by the federal Unlawful Internet Gambling Enforcement Act, saying that law doesn't cover Kalshi's event contracts. “IGRA thus confers upon the tribes a cause of action to enjoin Kalshi’s sports event contracts on their lands,” McKeown wrote. Les Marston, a lawyer for the tribes, said in an interview: “It's a tremendous victory for the tribes. What Kalshi is doing is immoral. It could have easily spent a few million dollars to geofence the tribes' operations.” The appeals court returned the case to U.S. District Judge Jacqueline Scott Corley in San Francisco, who denied a preliminary injunction last November.

US appeals court blocks Kalshi from offering event contracts on Native American lands

Robinhood and Kalshi react to the ruling

Broader fight over prediction market regulation continues

Court says Kalshi's contracts were not authorized on tribal lands

9th Circuit blocks Kalshi on tribal lands

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