Ninth Circuit rules Kalshi sports contracts likely illegal on California tribal lands
The Ninth Circuit ruled Wednesday that California tribes are likely to succeed in their claim that Kalshi's sports event contracts violate tribal gaming law on reservations. The decision, issued September 19, 2026, found the contracts likely constitute illegal sports betting under the Indian Gaming Regulatory Act regardless of their CFTC-regulated structure. The ruling revives the tribes' bid to block Kalshi and Robinhood from offering the contracts on tribal lands, reversing a lower court denial of a preliminary injunction. Blue Lake Rancheria brought the case.
Kalshi's preemption theory is collapsing in the circuit that matters most. The Ninth Circuit has now rejected it twice — first in Nevada, now in California — with each ruling inviting more tribal suits. The panel held that substance controls over form: CFTC designation does not transform sports gambling into something else.
This reasoning reaches every platform offering sports-linked contracts, including Robinhood, which the court also found unlawful. Geofence costs multiply with each new jurisdiction. Traders hold positions whose validity shifts with geography, not regulation. The Supreme Court remains Kalshi's only path to uniform rules, but cert grants are rare. Every month of consideration risks another tribe filing through the opening.
The California ruling joins the Nevada decision as the second Ninth Circuit loss holding that tribal gaming compacts override CFTC registration, deepening the circuit split New Jersey has asked the Supreme Court to resolve.