27 States Back California Tribes Suing Kalshi Over Sports Contracts Under Indian Gaming Law
Three California tribes are pursuing a separate Ninth Circuit case against Kalshi's sports contracts under the Indian Gaming Regulatory Act — a 1988 federal law governing tribal gaming rights that is independent of the CEA preemption arguments in the Nevada, NJ, and Connecticut cases. The Ninth Circuit refused consolidation with the Nevada case. A panel appeared skeptical of Kalshi in July. 27 states plus DC filed amicus supporting the tribes.
Three federally recognised California tribes — Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians — are pursuing a separate Ninth Circuit challenge to Kalshi's sports event contracts under the Indian Gaming Regulatory Act of 1988 (IGRA), a federal law entirely distinct from the Commodity Exchange Act preemption arguments at issue in the Nevada, New Jersey, Connecticut, and Michigan cases. The Ninth Circuit refused to consolidate the tribal case with the Nevada case decided 3-0 on August 28. The tribal case proceeds before a separate panel on separate legal questions.
For UK readers, the Indian Gaming Regulatory Act is analogous in structure to the UK Gambling Act's licensing framework but with a sovereignty dimension. The 1988 legislation granted federally recognised tribes exclusive rights to certain gaming activities within their territories in exchange for entering state-tribal compacts — agreements negotiated with state governments. The tribes in the California case argue that Kalshi's sports outcome contracts fall within the scope of gaming activity protected by their compacts, and that Kalshi's CFTC-designated contract market licence does not override the exclusive tribal gaming rights Congress granted under a separate federal statute. Two federal licences can conflict; IGRA was enacted to protect tribal economic interests specifically. Whether the later-enacted CFTC licence displaces tribal exclusivity is a federal pre-emption question within federal law — not a question of whether federal law overrides state gambling statutes.
The amicus filing from 27 states and the District of Columbia is significant. US amicus coalitions of this size in commercial litigation are rare; they indicate that states across the country, including many without active prediction market enforcement actions, view the tribal gaming exclusivity question as implicating their own regulatory authority. Tribal gaming compacts exist across most US states. A Ninth Circuit ruling that IGRA exclusivity covers Kalshi's sports contracts would set precedent applicable wherever tribes have compacts — which in practice means most of the country. The 27-state coalition suggests other AGs see the tribal case as a potential route to a national result through a different legal mechanism than the state-by-state CEA cases.
The IGRA theory is potentially more resilient to a pro-Kalshi SCOTUS ruling on the CEA question than the state enforcement cases. If the Supreme Court eventually rules that sports event contracts are swaps within CFTC exclusive jurisdiction, the CEA-based state enforcement actions in Nevada, New Jersey, Connecticut, and elsewhere would likely be struck down. But the IGRA exclusivity question — whether a CFTC-licensed product can override a competing federal statute granting tribes exclusive gaming rights — survives that SCOTUS ruling, because it concerns the interaction of two federal statutes rather than federal preemption of state law. The tribal case could therefore deliver an injunction against Kalshi's sports contracts in California and potentially other states regardless of how the CEA/swap circuit split resolves. That possibility alone explains why 27 states have filed amicus briefs in a case nominally about California tribal gaming rights.
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