Tribal Gaming Sovereignty Fight Over Kalshi Sports Contracts Paused for Ninth Circuit Preemption Ruling

The plaintiffs are three federally recognized Indian tribes — Blue Lake Rancheria and co-plaintiffs — who contend that Kalshi's sports-related event contracts constitute unauthorized gaming on Indian lands in violation of the Indian Gaming Regulatory Act, tribal gaming ordinances, and tribal sovereignty. The tribes also bring RICO claims, alleging Defendants operate an unlawful "Gaming Racket" and commit wire fraud by misrepresenting their contracts as legitimate commodity contracts tradable on a Commodities Futures Trading Commission-regulated exchange. The tribes further assert a Lanham Act claim. Robinhood Markets and Robinhood Derivatives are named alongside Kalshi as defendants.

The central legal fault line is whether the Commodity Exchange Act gives the CFTC exclusive jurisdiction over Kalshi's contracts — and whether that federal authority preempts both state gambling laws and tribal gaming ordinances under IGRA. Defendants argue it does. The tribes argue Kalshi's products are sports betting, not commodity contracts, and that this court and the CFTC have misread the relevant statutes.

The district court already denied the tribes' preliminary injunction in November 2025, finding that the plaintiffs had not shown a likelihood of succeeding on their IGRA and Lanham Act claims. As part of that analysis, the court reasoned that the Commodity Exchange Act grants the CFTC exclusive jurisdiction over Kalshi's contracts. That ruling is now on appeal before the Ninth Circuit as Case No. 25-7504. Separately, the Ninth Circuit heard argument on April 16, 2026 in KalshiEx, LLC v. Hendrick, Case No. 25-7516, which raises the same preemption questions in the context of state gambling laws. Nevada regulators and dozens of amici in Hendrick are pressing the argument that Kalshi's reading of the Commodity Exchange Act would impliedly repeal both IGRA and the Unlawful Internet Gambling Act.

Adding to the legal backdrop, the Third Circuit ruled on April 6, 2026 — ten days before the Ninth Circuit argument in Hendrick — that Kalshi had a reasonable likelihood of succeeding on its claim that the Commodity Exchange Act gives the CFTC exclusive jurisdiction and preempts state gambling laws under both field preemption and conflict preemption. KalshiEX, LLC v. Flaherty, 2026 WL 924004 (3d Cir. Apr. 6, 2026). Kalshi filed that decision as a statement of recent authority in the district court, arguing it directly bears on the exclusive jurisdiction issue, the Lanham Act claim, and whether the RICO predicate acts rely on preempted state laws.

U.S. District Judge Jacqueline Scott Corley, citing Landis v. N. Am. Co. and the Ninth Circuit's CMAX factors, said she is inclined to stay the case at least until Hendrick is decided, noting that the Ninth Circuit appeal directly bears on core issues in the case, including those raised in the motions to dismiss. The April 30 hearing on defendants' motions to dismiss is vacated. Simultaneous briefs of no more than ten pages are due May 1, 2026.