A California federal judge declined to issue a preliminary injunction on Monday blocking prediction platform Kalshi and Robinhood from offering their sports event contracts that some Native American tribes allege constitute illegal gambling, saying they have not shown how the platforms are subject to a statute protecting tribal gaming.
The order from U.S. District Judge Jacqueline Scott Corley rejected the tribes' arguments seeking the injunction under the Lanham Act or Indian Gaming Regulatory Act, finding they had not identified any false or misleading advertisements published by the defendants or shown a likelihood of prevailing on the argument that IGRA governs the sports contracts in question.
The judge wrote that IGRA, which was passed in 1988, does not address the online gaming activity the tribes allege the defendants are engaged in, but that the 2006 Unlawful Internet Gambling Enforcement Act does govern "internet gaming that can be accessed in locations where such gaming is unlawful, including Indian lands."
Judge Corley also said the Commodity Exchange Act appears to govern the claim — and the Commodity Futures Trading Commission has "exclusive jurisdiction" to regulate commodities and futures on commission-designated exchanges.
"Plaintiffs point to no applicable exception," the judge said. "Additionally, while plaintiffs argue the event contracts are presumptively unlawful under the act, 'presumption' and any variation of that word are absent from the Commodity Exchange Act, its special rule for event contracts or commission regulations for self-certification."
"The Commodity Exchange Act's special rule provides 'the commission may determine' event contracts are 'contrary to the public interest,'" the judge continued. "Congress did not say courts could so determine or that the commission must make a presumption. Rather, the only enforcement mechanism belongs to the commission, which 'may determine that an event contract 'be subject to a 90-day review' period during which the contract listing is suspended pending a final determination."
The tribes sued Kalshi and Robinhood Markets Inc. in July, alleging the companies' "event contracts" — which allow users to "predict" the outcome of sporting events — are actually just unregulated sports gambling that violates federal, state and tribal law.
The tribes, including the Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, sought the injunction in September seeking to prevent Kalshi from offering sports contracts on their lands, arguing Kalshi's advertising is illegal and detracts from the tribes' casinos.
Event contracts typically pose a binary, yes-or-no question regarding whether the underlying event will occur, according to the suit. The contracts are governed by the Commodity Exchange Act, according to the suit. Aside from the IGRA and Lanham Act claims, the tribes also brought five claims that were not the subject of the preliminary injunction request.
The Lanham Act claim focused on two of Kalshi's advertisements, including one that said "sports betting [is] legal in all 50 states on Kalshi," which the tribes argued is "literally or facially false" due to federal and state prohibitions on sports gambling.
A Kalshi social media post challenged by the tribes said, "Really hope kids in high school still do this," with a photo of "four screens playing basketball games," and they argued it implies people under 18 can gamble on sports.
The judge wrote that Kalshi's advertisement about all 50 states "is merely stating an opinion its product is legal, and given multiple courts have agreed with it, plaintiffs have not shown the opinion is literally false or that Kalshi lacks a good faith belief in the opinion's truth."
The judge cited several cases with decisions that went in Kalshi's favor on the topic, including an April ruling by a Nevada federal judge that held the state cannot prohibit online trading platform KalshiEx LLC from allowing users to place bets on the outcome of sports events and elections because both are currently permitted under federal law.
On the post about kids in high school, the judge wrote the tribes did not allege a competitive injury "because neither plaintiffs nor Kalshi allow patrons under 18 years of age to gamble."
On the IGRA claim, the judge said the court has jurisdiction over such claims only if plaintiffs are seeking to enjoin "Class III gaming activity located on Indian lands and conducted in violation of any tribal-state compact" that is in effect, and the tribes did not show a likelihood of success on the merits.
"Since it is undisputed Kalshi is a registered entity under the Commodity Exchange Act, and that its transactions are conducted on the Kalshi internet site, its internet contracts are not bets or wagers under the UIGEA and therefore do not constitute 'unlawful internet gambling' even if the contracts are received, placed or transmitted from persons on Indian lands where internet gambling is illegal," the judge wrote.
According to the ruling, before listing a contract on a Commodity Futures Trading Commission exchange, a designated contract maker can request and receive approval from the commission or self-certify its contracts are lawful.
Kalshi self-certified the sports contracts at issue in the suit, the judge wrote.
"As a final note, the court does not take lightly plaintiffs' concerns about the effects Kalshi's activities might have on tribal sovereignty and the tribes' finances," the judge wrote. "Indeed, by self-certifying the legality of its event contracts in way that insulates its activities from judicial review, Kalshi may have found a way around prohibitions on interstate gambling that were created with the tribes' best interest in mind."
"But, on the record currently before the court, and in light of the Commodity Exchange Act's self-certification process, plaintiffs have not met their burden of showing a likelihood of success on their IGRA claim," the judge wrote.
"We welcome today's decision denying the plaintiff tribes' motion for a preliminary injunction. Kalshi's nationwide, federally regulated exchange offers all users a fair and transparent way to trade event contracts," a Kalshi spokesperson said in a written statement on Monday. "Casinos located on tribal lands offer their customers a fundamentally different product."
Counsel for the plaintiffs did not immediately respond to requests for comment.
Kalshi is represented by Grant R. Mainland, Joshua B. Sterling, Karen Wong and Olivia S. Choe of Milbank LLP and Christopher C. Wheeler and Dylan M. Silva of Farella Braun & Martel LLP.
Robinhood is represented by Mark R. Conrad of Conrad Metlitzky Kane LLP, Mithun Mansinghani of Lehotsky Keller Cohn LLP, and Antony L. Ryan, Kevin J. Orsini and Brittany L. Sukiennik of Cravath Swaine & Moore LLP.
The case is Blue Lake Rancheria et al. v. Kalshi Inc. et al., case number 3:25-cv-06162, in the U.S. District Court for the Northern District of California.
Nov 10
Deal Summary
