Ninth Circuit panel questions Kalshi over sports event contracts on tribal lands
Three California tribes argue that Kalshi’s sports event contracts amount to unauthorised Class III gaming on tribal lands, violating the Indian Gaming Regulatory Act (IGRA).
US.- The Ninth Circuit panel pressed Kalshi on Friday to explain why its sports-event contracts should be treated differently from conventional sports betting under federal law. The panel is hearing an appeal filed by Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians and Picayune Rancheria of the Chukchansi Indians, which are seeking to revive a request for a preliminary injunction that a federal judge denied last year.
The tribes have argued that Kalshi’s contracts amount to unauthorised Class III gaming on tribal lands, violating the Indian Gaming Regulatory Act (IGRA) and threatening tribal sovereignty. Much of the hearing focused on whether the company’s products are materially different from sportsbook wagers.
Judge M. Margaret McKeown asked Kalshi attorney Grant Mainland to consider a person on tribal land buying a Kalshi contract tied to a San Francisco Giants victory while placing the same wager through DraftKings. Mainland replied that designated contract markets are regulated differently from sportsbooks but later acknowledged that trading on whether a team wins a game “has some similarity” to making the same wager through DraftKings.
The tribes’ attorney Lester Marston argued that conduct that may be lawful off a reservation becomes illegal once it occurs on tribal lands. Citing United States v. Mazurie, he said a person who places money on a World Cup match through Kalshi is wagering on the outcome of a sporting contest and therefore engaging in conduct that falls within IGRA’s definition of Class III gaming.
Marston also relied on Michigan v. Bay Mills Indian Community, arguing that the relevant location is where the patron places the wager, not where the servers processing the transaction are located.
Can tribes sue under the IGRA?
Another key issue was whether the tribes have standing to sue under the IGRA. The tribes argued that their gaming ordinances, tribal-state compacts and the IGRA form an integrated regulatory framework, while Kalshi contended that the IGRA’s text does not grant tribes a cause of action against a private party in these circumstances.
Mainland argued that accepting the tribes’ theory would create “a 240 tribe exception” to the Commodity Futures Trading Commission’s exclusive jurisdiction over designated contract markets.
The Ninth Circuit has no set deadline for a decision. The court could affirm the denial of the injunction, reverse and return the matter to the district court for reconsideration, or resolve the appeal on the narrower question of whether the tribes have standing to sue under the IGRA.
