Kalshi Faces Major Court Setback as Judge Blocks Sports Betting on Tribal Lands

Summary

• A federal judge barred Kalshi from offering sports prediction contracts on two California tribal lands following a major legal dispute.
• The Ninth Circuit supported tribal gaming claims, rejecting Kalshi’s argument that federal commodities oversight overrides the tribes’ gambling law protections.
• Arkansas and Utah have launched separate legal actions against Kalshi, alleging illegal gambling operations and violations of state gaming laws.

Kalshi has suffered a major legal setback after a federal judge ordered the prediction market platform to halt sports contracts on two California tribal lands. The ruling strengthens the tribes’ legal position in a dispute over gambling rights and federal oversight.

According to the court order, U.S. District Judge Jacqueline Scott Corley granted a preliminary injunction against Kalshi’s sports event contracts. The restriction applies to the territories of Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians.

The injunction covers contracts involving football, basketball, baseball, soccer, tennis, and Ultimate Fighting Championship events. Consequently, Kalshi must restrict access to these markets within the affected tribal territories.

Judge Corley also directed both tribes to submit maps identifying their territorial boundaries by November 13. Additionally, Kalshi must provide a compliance report within 21 days, outlining measures taken to enforce the restrictions.

Sports and gaming attorney Daniel Wallach described the decision as a significant development in tribal gaming litigation. According to Wallach’s November 5 post on X, this marks the first preliminary injunction tribes have secured against Kalshi nationwide.

Ninth Circuit Ruling Strengthens Tribal Gaming Claims Against Kalshi

The latest injunction follows a legal battle that began in July 2025, when both California tribes sued Kalshi. Their lawsuit accused the company of offering unauthorized gambling services within territories protected by federal tribal gaming laws.

Specifically, the tribes argued that Kalshi’s sports contracts violated the Indian Gaming Regulatory Act and their respective gaming ordinances. They maintained that these contracts constituted Class III gaming activities requiring proper authorization under applicable tribal gaming rules.

Kalshi challenged those allegations by arguing that federal commodities law governs its sports prediction contracts. The company maintained that the Commodity Exchange Act grants the CFTC exclusive authority over such products.

Initially, Judge Corley rejected the tribes’ request for a preliminary injunction in November 2025. The tribes subsequently appealed that decision, bringing the dispute before the Ninth Circuit Court of Appeals.

In September 2026, a Ninth Circuit panel partially overturned the earlier ruling and supported key elements of the tribes’ arguments. The appeals court determined that the tribes were likely to succeed on claims involving federal gaming law violations.

Significantly, the panel rejected Kalshi’s argument that the CFTC’s exclusive jurisdiction displaced the tribes’ claims concerning these sports contracts. That decision cleared the way for the district court to impose restrictions on Kalshi’s operations within tribal territories.

Kalshi Faces Additional Gambling Lawsuits in Arkansas and Utah

Beyond California, Kalshi faces additional legal challenges as state authorities question the legality of its sports prediction markets. Arkansas Attorney General Tim Griffin filed a lawsuit against the company on November 5, alleging illegal gambling operations.

Griffin argued that placing money on the outcome of Arkansas Razorbacks games constitutes gambling under state law. The complaint adds another dispute over whether Kalshi’s federally regulated contracts can operate despite state gambling restrictions.

Meanwhile, Utah prosecutors filed criminal charges against Kalshi and two company executives on October 29. Authorities accused the defendants of illegally promoting online gambling services within the state.

Utah also pursued a separate civil lawsuit against Kalshi and two Susquehanna trading firms over alleged illegal gambling activities. Together, these cases highlight growing legal disagreements over the treatment of sports prediction contracts under federal and state regulations.

The California injunction applies specifically to the two tribes’ territories rather than Kalshi’s nationwide operations. Nevertheless, the ruling establishes an important development as other jurisdictions pursue legal challenges against the prediction market operator.