The third sovereign: Tribes take on prediction markets

Everyone covering the prediction market legal war has been watching states. The more dangerous case is being argued in the Ninth Circuit by three California tribes under a different statute entirely, and at oral argument this month a judge told Kalshi’s lawyer that its contracts sound like a bet. Summary Three California tribes, Blue Lake Rancheria, Chicken Ranch Rancheria, and Picayune Rancheria, sued Kalshi arguing its sports event contracts constitute unlicensed Class III gaming on tribal lands under the Indian Gaming Regulatory Act. A federal district judge denied their preliminary injunction in November, finding that the compacts and secretarial procedures did not prohibit Kalshi’s conduct and that federal internet gambling law excludes transactions on entities registered under the Commodity Exchange Act. The Ninth Circuit heard argument this month, and the panel questioned Kalshi sharply, with one judge stating the contracts sound like a bet subject to Native American gambling law and another suggesting it would not be unreasonable to exclude tribes from federal preemption here. This is analytically distinct from the state cases dominating coverage: it turns on IGRA and triba...