A federal judge has barred Kalshi from offering sports contracts on tribal land in California, the latest loss for a company that insists it is a commodities exchange and not a betting site.
The preliminary injunction went to the Blue Lake Rancheria and the Chicken Ranch Rancheria of Me-Wuk Indians, which sued under the Indian Gaming Regulatory Act. The court found that Kalshi's sports trading amounts to Class III gaming, the category that covers sports betting and pool wagering. It also found that rules from the Commodity Futures Trading Commission (CFTC), Kalshi's federal regulator, do not preempt the tribal gaming law. In other words, federal commodities oversight did not push the gaming statute aside.
On the same day, Arkansas Attorney General Tim Griffin announced a suit under the state's Deceptive Trade Practices Act, alleging illegal gambling. Utah filed criminal charges in late October against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara, with counts including unlawful activity and online gambling promotion. New York has sued over "unlicensed gambling," and both New York and Arkansas object that Kalshi lets users as young as 18 trade.
The appellate record is thin on good news for the company. A 6th Circuit panel said in September that Ohio and Tennessee can apply their gambling laws to Kalshi contracts. A 9th Circuit panel gave Nevada the right to ban the platform in August. The 2nd Circuit then denied Kalshi's request for a preliminary injunction in the New York and Connecticut cases.
The pattern matters because the dispute turns on one question: does federal commodities law override state gambling law? Judges in different courts, citing both the Commodity Exchange Act and CFTC rules, keep answering no. Kalshi's defense, that its "swaps" are not bets and that a lack of traditional odds sets it apart, has not carried the day, and some states have quoted the company's own marketing against it.
Kalshi has also been the one filing suits against states trying to regulate it. The CFTC has now filed a string of countersuits against states as well, so the fight is no longer only one company against state regulators.