Kalshi Tribal-Land Bets Are Class III Gaming: Ninth Circuit

The Ninth Circuit held on September 16, 2026 that Kalshi's sports event contracts are class III gaming under the Indian Gaming Regulatory Act, and that they happen on Indian lands when a user buys one while standing on a reservation. The same opinion holds that the Commodity Exchange Act's "exclusive jurisdiction" clause does not shut federal courts out of the question. Two California tribes had been refused a preliminary injunction against Kalshi and Robinhood; the panel reversed that refusal and sent the case back. No court has ordered Kalshi to stop anywhere, and no sweepstakes casino is a party to any of it. What changed is the argument: the "exclusive jurisdiction" defence that the wider "this is not gambling" industry leans on has now failed in this court twice in nineteen days.

The case is Blue Lake Rancheria v. Kalshi, Inc., No. 25-7504, an appeal from the Northern District of California. The appellants are two federally recognised California tribes, Blue Lake Rancheria and the Chicken Ranch Rancheria of Me-Wuk Indians. The defendants are Kalshi, Inc. and KalshiEX LLC together with Robinhood Markets, Inc. and Robinhood Derivatives LLC, which the opinion describes as acting as "a retail distributor for Kalshi's products" - so the holding reaches the app most retail users actually buy these contracts through, not only Kalshi's own.

Judge M. Margaret McKeown wrote for a panel that also included Chief Judge Mary H. Murguia and Judge Richard A. Paez. It is a published opinion, argued on July 10 and filed on September 16. We downloaded the 38-page opinion from the court's own site and read it in full, which is how we check everything we publish.

We flagged this appeal as the thing to watch when we reported that the district court case was frozen waiting on it. It is no longer pending.

What did the Ninth Circuit decide?

That the tribes are likely to win, and that the district judge got three separate questions wrong.

The opinion opens with the reader in it: "Say you live in California and want to wager whether the San Francisco Giants will win on Sunday. In California, where sports betting is illegal, you can't place your bet. Instead, you might try to buy an 'event contract' keyed to that outcome."

Under the Indian Gaming Regulatory Act, the tribes had to show three things. The panel found all three likely.

On the first point the panel was blunt about method. "The analysis is functional. IGRA does not ask whether the operator labels the product a bet or an event contract, or something else. It asks what the activity looks like." It then runs the comparison itself: a user on the floor of the Blue Lake Casino Hotel opens Kalshi and DraftKings and stakes $100 on the same Giants outcome on each. "The bettor, the place, the stake, and the contingency remain the same. The only thing that changes is Kalshi's vocabulary."

The tribes lost one claim. Their Lanham Act case over Kalshi's advertisement that "Sports Betting [Is] Legal in all 50 States on Kalshi" was rejected, because a lay statement about what a statute means is opinion, not a statement of fact. The panel's reason is a sentence the industry should sit with: "The legality of Kalshi's products remains unsettled, and that state of affairs forecloses a viable Lanham Act claim."

The order is affirmed in part, reversed in part, and remanded, with the district court told to work through the remaining preliminary-injunction factors. No injunction has issued. The parties bear their own costs.

Why does this Kalshi ruling matter to sweepstakes casino players?

Because of the third holding, which is about a phrase rather than a product.

Kalshi's central defence is that its contracts trade on a federally designated contract market, that the Commodity Futures Trading Commission has "exclusive jurisdiction" over them under 7 U.S.C. section 2(a)(1)(A), and that everything else therefore gets out of the way. The panel read that phrase narrowly. "The phrase 'exclusive jurisdiction' is not a broad grant to the Commission of control over all commodities-related matters to the exclusion of all other federal laws." And its summary: "the CEA may grant the Commission sole sway over its own field, but it neither negates IGRA nor bars federal courts from hearing a claim under it."

The panel also refused to let the Unlawful Internet Gambling Enforcement Act carry Kalshi's weight. That statute excludes anything traded on a registered exchange from its definition of a bet, which Kalshi argued displaces IGRA. The opinion answers that the UIGEA "disavows any intent to 'alter[], limit[], or extend[]' existing federal, state and tribal gaming regulations", and that "Kalshi's argument confers upon the UIGEA a displacing effect that Congress expressly denied it."

A sweepstakes casino has no CFTC licence and no exchange, so none of this applies to one directly, and the CFTC has separately warned prediction markets off sweepstakes-style rewards rather than the other way round. The connection is the shape of the argument. The whole dual-currency model rests on the claim that a federal or contractual framing beats a state's own view of what gambling is, and our guide to where sweepstakes casinos are legal sets out how differently the states answer that. Three weeks ago the same court held that Kalshi's contracts are likely bets rather than swaps, so Nevada can enforce its gaming law. That decision was about state power. This one says the same phrase does not displace a separate federal statute either.

It also lands in the middle of a live fight. Six state attorneys general have been sued by Underdog since September 8 on a preemption theory of the same family, and one of those six cases sits in the Western District of Washington, inside this circuit and in the state where Kalshi began geofencing its sports markets after losing a preemption ruling in August. The amici here line up the other way: the caption records briefs "for Amici Curiae Massachusetts, California, 25 Other States, and the District of Columbia", and the attorneys general listed in that block include California, Nevada, Ohio, New Jersey, Connecticut, Washington and Louisiana. The American Gaming Association filed too, as did the Indian Gaming Association, the National Congress of American Indians and "15 Federally Recognized Tribes". Paradigm Operations LP filed separately; the opinion records the brief but not the side it argued.

Is this the end of the Kalshi tribal lands cases?

No. It settles one appeal and leaves the rest running.

The district court case was stayed by an order docketed on May 22, 2026, and Judge Jacqueline Scott Corley has set a status conference for September 24 at 9:30 a.m. by Zoom, open to the public and the press. The appellate outcome reached that docket the same day it was filed: entry 96 on September 16, a text-only clerk entry labelled "USCA Memorandum" with no public document behind it. A third tribe, Picayune Rancheria of the Chukchansi Indians, was dismissed from the appeal without prejudice after oral argument by joint stipulation, and the two remaining tribes have a pending motion for leave to amend and add another plaintiff, which is set for that same September 24 slot.

Separately, the Ho-Chunk Nation's IGRA case against Kalshi and Robinhood in Wisconsin was stayed on September 11 and certified for a Seventh Circuit appeal, a court that has not yet been asked to take it. The Ninth Circuit's opinion here notes that the Tenth Circuit has already read the same IGRA cause-of-action provision the same way, in Comanche Nation v. Ware, 174 F.4th 717 (10th Cir. 2026).

And the August ruling this one builds on is itself not final. Kalshi petitioned for panel rehearing and rehearing en banc in No. 25-7516 on September 9, 2026, so the mandate in the Nevada case has not issued. This opinion is one day old, so the deadline for a rehearing petition in the tribal case has not arrived and nothing has been filed.

For a reader deciding where to spend money this week, none of that changes anything. No court has ordered Kalshi to stop anywhere, and none of these cases touches a sweepstakes site's availability or your balance. The one thing worth acting on is narrower: if a sweeps brand markets sports wagering to you, the question to ask is which document authorises it, in your state, in writing. Sportzino is the only brand we rank that runs a real sportsbook beside its casino, and our review sets out the 16 states where its own Sweeps Rules bar redemption. Every brand we rank is listed with the paperwork we could actually read.

Sources & documents

• Opinion in Blue Lake Rancheria v. Kalshi, Inc., No. 25-7504 - 38 pages, filed September 16, 2026, the source of every quotation above
• Ninth Circuit opinions page - where the decision was listed as filed on September 16
• District court docket, Blue Lake Rancheria v. Kalshi, Inc. and its entry list - the May 22 stay, the September 14 order setting the September 24 conference, and entry 96 on September 16
• Opinion in KalshiEX, LLC v. Assad, No. 25-7516 - the August 28 ruling this opinion repeatedly relies on

21+ only. Nothing above is legal advice, and no court has ruled on whether any sweepstakes casino is lawful in your state. If gambling stops being fun, call 1-800-GAMBLER or read our responsible gaming resources.