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

Key facts

• A federal appeals court blocked Kalshi from offering event contracts on Native American lands.
• The ruling stated Kalshi's contracts likely violated the Indian Gaming Regulatory Act.
• The Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians were involved in the case.
• The court found that Kalshi's event contracts constituted placing a bet or wager.
• Robinhood Markets is a customer of Kalshi and could lose business due to the ruling.
• A bipartisan coalition of 27 states and Washington D.C. sided with the tribes' appeal.

A federal appeals court on Wednesday blocked Kalshi, a prediction markets platform, from offering event contracts on the lands of two California tribes. The 9th U.S. Circuit Court of Appeals ruled 3-0 that the Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians would likely succeed in showing that Kalshi's contracts violated the federal Indian Gaming Regulatory Act and the tribes' own gaming ordinances.

Circuit Judge Margaret McKeown stated that 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. The court rejected Kalshi's argument that the Indian Gaming Regulatory Act was displaced by the Unlawful Internet Gambling Enforcement Act, finding that the latter law does not cover Kalshi's event contracts. The ruling returns the case to U.S. District Judge Jacqueline Scott Corley.

This decision marks the second legal setback for Kalshi in less than a month, following a previous ruling that the platform was subject to oversight by Nevada gaming regulators. The case highlights a broader dispute over whether prediction markets should be regulated as gambling or as financial markets. Robinhood Markets, a Kalshi customer, expressed concern about potential business losses and is evaluating its legal options. A bipartisan coalition of 27 states and Washington D.C. supported the tribes' appeal, arguing that a ruling for Kalshi would undermine state authority over illegal gambling.