A federal judge just shut down a push by three California tribes to block Kalshi’s sports betting contracts on tribal lands, even as she hinted the platform might be skirting gambling laws. This ruling keeps the prediction market buzzing in Indian Country, raising big questions about future regulations.
Federal Judge Jacqueline Scott Corley ruled on Monday that Kalshi can keep offering its sports event contracts in Indian Country. She denied an injunction sought by Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians. This decision means Kalshi’s operations stay uninterrupted, allowing users to bet on outcomes like sports games through yes-or-no contracts.
The tribes wanted to stop Kalshi from using their lands for these markets, arguing it violated gambling prohibitions. But Judge Corley said the tribes failed to prove enough harm for an injunction. She pointed out that the Unlawful Internet Gambling Enforcement Act exempts contracts covered by the Commodity Exchange Act, which oversees Kalshi.
During an October hearing, the judge showed sympathy for the tribes’ worries about gambling’s effects on their communities. In her opinion, she noted Kalshi “may have found a way around prohibitions on interstate gambling.” Still, she ruled against the injunction, stressing the need for clear jurisdiction.
This keeps Kalshi’s platform active in tribal areas, where federal laws sometimes differ from state rules. Users across the U.S. can place bets, potentially boosting Kalshi’s growth amid a surge in prediction markets.
Tribes’ Pushback and Legal Arguments
The three tribes filed their lawsuit claiming Kalshi’s contracts amounted to illegal gambling on their sovereign lands. They argued these yes-or-no bets on sports events broke federal and tribal laws, harming their communities by encouraging addictive betting.
Judge Corley acknowledged the moral weight of the tribes’ concerns, writing that she did not take lightly the potential effects on tribal welfare. Yet, she found the tribes’ case lacking on key points, like proving irreparable harm or jurisdiction over Commodity Futures Trading Commission-regulated contracts.
In court filings, the tribes highlighted how Kalshi’s model lets people bet from anywhere, possibly flooding Indian Country with unregulated gambling. They sought to enforce stricter controls, but the judge ruled their claims under the Unlawful Internet Gambling Enforcement Act did not hold up against Kalshi’s federal approvals.
One short point: The ruling does not end the debate. The tribes could appeal, keeping the pressure on.
Experts say this case spotlights tensions between tribal sovereignty and federal oversight of financial markets. With prediction markets exploding in popularity, similar challenges might pop up elsewhere.
Kalshi’s Rise Amid Regulatory Battles
Kalshi, a New York-based platform, lets users trade contracts on real-world events, from elections to sports. Founded in 2018, it gained Designated Contract Market status from the Commodity Futures Trading Commission in 2021, making it a legal player in event betting.
The company has faced multiple lawsuits, including from states like New York and Ohio, over its sports contracts. In recent months, Kalshi sued regulators in those states, arguing federal law preempts local bans. This Indian Country case adds to a string of wins for Kalshi, following a 2024 ruling that allowed U.S. election betting.
Data from Kalshi shows over $1 billion in trading volume in 2025 alone, up from $200 million the previous year, according to company reports. This growth ties to high-profile events like the 2024 presidential race, where Kalshi’s markets often outperformed polls.
Here are key milestones in Kalshi’s legal journey:
- 2021: Gains CFTC approval as a Designated Contract Market.
- 2024: Federal court allows election contracts despite CFTC pushback.
- 2025: Wins against state bans in Nevada and Maryland appeals.
These victories position Kalshi as a leader in prediction markets, rivaling platforms like Polymarket. But critics worry about addiction risks, especially in vulnerable communities.
Broader Implications for Gambling and Markets
This ruling could reshape how prediction markets operate in the U.S., especially in areas with unique legal statuses like Indian Country. By denying the injunction, Judge Corley essentially upheld federal supremacy over state and tribal gambling laws for CFTC-regulated products.
Industry watchers predict more platforms might target tribal lands to bypass state restrictions, sparking a wave of similar lawsuits. A 2025 report from the American Gaming Association noted that sports betting revenue hit $10 billion nationwide, with prediction markets adding a new layer of complexity.
For everyday users, this means easier access to betting on events without traveling to casinos. But it also raises fears of increased gambling problems. The National Council on Problem Gambling reported a 30% rise in helpline calls since 2023, linked to online betting growth.
In a twist, some see prediction markets as tools for better forecasting. During the 2024 election, Kalshi’s odds predicted outcomes more accurately than traditional polls, with a 95% success rate on congressional races, per a University of Pennsylvania study from early 2025.
| Year | Key Event | Outcome |
|---|---|---|
| 2021 | CFTC Approval | Kalshi launches as legal market |
| 2024 | Election Betting Ruling | Allowed despite appeals |
| 2025 | Indian Country Case | Injunction denied |
This table highlights Kalshi’s steady push through legal hurdles.
The decision might encourage innovation, but it also spotlights the need for balanced regulations to protect communities.
This ruling marks a pivotal win for Kalshi, affirming its place in the evolving world of prediction markets while highlighting ongoing battles over gambling in Indian Country. It underscores the clash between innovation and cultural protections, leaving room for future appeals and reforms.
