Ninth Circuit: Kalshi’s Tribal Contracts Violate Indian Gaming Law
On September 16, 2026, the Ninth Circuit ruled Kalshi’s tribal contracts violate the Indian Gaming Regulatory Act.
Why it matters: In-house legal teams and legal ops face new compliance challenges as the ruling tightens oversight on prediction markets operating under tribal gaming laws.
- On September 16, 2026, the Ninth Circuit classified Kalshi’s tribal sports contracts as class III gaming under the Indian Gaming Regulatory Act (IGRA).
- The court reversed a lower court’s denial of a preliminary injunction, siding with tribes alleging violations of California and federal gaming laws.
- Judge M. Margaret McKeown stated, “Kalshi may reshuffle the cards, but it cannot change the hand,” affirming IGRA coverage.
- Les Marsten, attorney for the tribes, called Kalshi and Robinhood’s practices “immoral,” noting Robinhood’s $156 million Q2 2026 revenue from event contracts.
On September 16, 2026, the Ninth Circuit Court of Appeals ruled that Kalshi’s sports event contracts made on tribal lands are covered by federal law as class III gaming under the Indian Gaming Regulatory Act (IGRA). This ruling reversed a lower court's refusal to grant a preliminary injunction and sided with tribes claiming Kalshi’s wagers violated California and federal gaming laws.
Class III gaming, which includes casino-type gambling activities, requires tribal compacts and federal oversight. The court emphasized that Kalshi’s contracts, despite appearing as prediction markets, fall squarely within this category. Judge M. Margaret McKeown wrote, “Kalshi may reshuffle the cards, but it cannot change the hand,” underscoring the contracts’ regulatory status.
Les Marsten, attorney representing the tribes, described Kalshi and Robinhood’s operations as “immoral.” He highlighted that Robinhood’s event contract revenue reached $156 million in Q2 2026, surpassing its equities and cryptocurrency trading revenues, signaling growing regulatory scrutiny of such fintech products.
The court dismissed the tribes' claim under the Lanham Act related to advertising, ruling it was a nonactionable legal opinion. However, the case was sent back to the lower court to consider whether other factors support further injunctions. This ongoing litigation highlights tensions at the intersection of tribal sovereignty, federal gaming regulation, and emerging financial products.
For legal professionals advising fintech firms or managing compliance in regulated environments, the ruling signals amplified risks when engaging in contracts on tribal lands. It demonstrates the need to align offerings with IGRA and state laws while navigating complex tribal-federal relationships. Monitoring further judicial and regulatory developments will be essential for prediction market platforms and counsel.
By the numbers:
- September 16, 2026 — Date of Ninth Circuit ruling
- $156 million — Robinhood’s Q2 2026 revenue from event contracts
- 22-15973 — Ninth Circuit case number for Kalshi litigation
Yes, but: The court rejected the tribes' Lanham Act claim, signaling limits to legal challenges based on advertising practices.
What's next: The case is remanded to the lower court to consider additional injunction factors, with future rulings expected.