2025-11-12 20:22 |
Kalshi has scored another win in its fight to define the future of sports prediction markets.
On Monday, a California federal judge refused to block the platform’s contracts, siding with the company’s argument that it is a federally regulated exchange and not a sportsbook. The ruling hands tribes their first loss in a fast-expanding legal battle that could redraw the boundaries of gambling law.
Court Says CFTC, Not Tribes, Regulates Event ContractsU.S. District Judge Jacqueline Scott Corley rejected a motion for a preliminary injunction from Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians. The tribes sought to block Kalshi from offering “sports event contracts” accessible from tribal lands, arguing that the operator’s activities violated the Indian Gaming Regulatory Act (IGRA) and constituted unlicensed Class III gaming.
Corley disagreed. In her 28-page order, she ruled that Kalshi’s operations fall under the Commodity Exchange Act (CEA) and the oversight of the Commodity Futures Trading Commission (CFTC).
“The UIGEA, unlike IGRA, expressly addresses internet gaming that can be accessed in locations where such gaming is unlawful, including Indian lands,” Corley wrote, referring to the Unlawful Internet Gambling Enforcement Act (UIGEA). Because Kalshi is registered with the CEA, its online contracts “are not bets or wagers under the UIGEA,” even if users trade them while on tribal property.
Judge Corley is also persuaded by Kalshi's argument that interstate (or in this case, state-to-Indian) gaming issues are governed by UIGEA, not IGRA, and UIGEA carves out trading activity governed by the CEA. pic.twitter.com/n7hdJx5aJw
— Andrew Kim (@akhoya87) November 10, 2025 Expanding Legal BattlesThe ruling follows a string of federal victories for Kalshi, which has faced regulatory pressure from states including Maryland, Nevada, and New Jersey. In each case, judges have declined to halt its operations while litigation continues, citing the CFTC’s exclusive jurisdiction over federally registered exchanges.
Still, tribal governments remain central to the fight. Their lawsuits argue that prediction markets siphon revenue from tribal gaming and erode sovereign authority. Earlier this year, a similar challenge helped pause Crypto.com’s event-contract offerings in Nevada.
Judge Acknowledges Tribal ConcernsCorley acknowledged those sovereignty concerns but said they weren’t grounds for a preliminary injunction.
“By self-certifying the legality of its event contracts in a way that insulates its activities from judicial review,” she wrote, “Kalshi may have found a way around prohibitions on interstate gambling that were created with the Tribes’ best interest in mind.”
What the Decision Means for Prediction MarketsWhile the order is limited to preliminary relief, it reinforces the federal footing Kalshi and similar firms rely on. The court’s reasoning effectively affirms that CFTC-regulated exchanges sit outside state and tribal gambling frameworks, at least for now.
That interpretation narrows the reach of IGRA and state gaming laws in the online prediction-market space, underscoring the jurisdictional gap between traditional gambling regulation and federally registered financial exchanges.
Industry observers say the decision could encourage other platforms to expand their offerings while awaiting further federal guidance.
At the same time, the ruling heightens pressure on the CFTC, which has yet to issue clear rules around sports-based or election-based event contracts. Congress and federal agencies may now face renewed calls to clarify where prediction markets end and gambling begins.
For tribes, the legal route has narrowed but not closed. Their best leverage may now shift from courtroom litigation to legislative advocacy, pushing for clearer boundaries between financial contracts and games of chance.
Ultimately, Corley’s order keeps Kalshi trading, keeps tribes frustrated, and keeps the federal government in charge — at least until the Ninth Circuit or the CFTC decides otherwise.
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