Reported / Citable
Background
Two federally recognized California tribes sought a preliminary injunction against Kalshi and related entities offering sports event contracts through a federally regulated prediction market. The products let customers take positions based on sporting-event outcomes. The tribes argued that the contracts amounted to gaming conducted in Indian country without complying with the Indian Gaming Regulatory Act (IGRA) and interfered with the exclusivity protected by tribal gaming law.
The district court denied preliminary relief. On appeal, the tribes pursued their IGRA theory and a Lanham Act false-advertising claim based on statements describing the products as legal.
The Court’s Holding
The Ninth Circuit reversed in part. It concluded that the tribes were likely to succeed on the IGRA claim because the event contracts constituted gaming activity within the statute’s framework, and federal commodities regulation did not displace IGRA’s application. The panel remanded so the district court could decide the remaining preliminary-injunction factors, including irreparable harm and the balance of equities.
The panel affirmed rejection of the Lanham Act theory. Whether the products are lawful remains a disputed legal question, and lay statements expressing a view about unsettled law are opinions rather than actionable false statements of fact.
Key Takeaways
- Federally regulated event contracts may still implicate IGRA when their substance is sports wagering.
- Likelihood of success was established only for purposes of preliminary relief; the district court must still weigh the other injunction factors.
- Federal regulation under one statutory scheme does not automatically preempt or displace another federal statute.
- Advertising that states an opinion on unsettled legality generally cannot support a Lanham Act false-statement claim.
Why It Matters
The ruling matters to tribes, prediction markets, financial platforms, and businesses distributing event-contract products in California. It rejects the premise that Commodity Futures Trading Commission oversight alone insulates sports-linked contracts from tribal gaming law.
On remand, the practical question will be whether the tribes can satisfy the remaining equitable requirements for an injunction. Businesses in this fast-changing market should assess product design, distribution, and promotional claims under both commodities and gaming regimes.
The decision is not a final merits judgment or an injunction by itself. It establishes the tribes’ likelihood of success and sends the case back for the remaining equitable analysis. The parties therefore still must develop evidence about competitive and sovereign harm, effects on customers and counterparties, and the public interest. Market participants should not read federal approval of a contract market as a universal legality determination. Where products overlap with regulated gaming, counsel should map every potentially applicable sovereign and statutory regime before launch.
The procedural posture matters when using this opinion. A published Ninth Circuit decision supplies binding circuit law unless later rehearing or Supreme Court review changes it; an unpublished memorandum is generally nonprecedential but still illustrates how the panel evaluated the record. Counsel should separate the rule of law from facts that merely explain the outcome, confirm whether an issue was preserved, and check the mandate and subsequent history before relying on the result. Transactional and compliance teams can use the decision prospectively by documenting the facts that the court treated as decisive. Litigators should build that documentation into declarations, discovery, and the statement of undisputed facts rather than waiting until appeal. Where the panel remanded, the prevailing party still has work to do and should not describe the opinion as a final merits victory. Where it affirmed, lawyers should identify whether the holding rests on statutory interpretation, contract language, evidentiary failure, or harmless error, because that distinction determines how readily the analysis transfers to another dispute.