TLDR
- Ninth Circuit ruled two California Tribes are likely to win their IGRA claim against Kalshi
- Senate failed to advance the CLARITY Act after Tribal groups pushed back
- CFTC continues to back Kalshi’s access to federally regulated markets
- New Mexico and Blue Lake court hearings are set for September 23 and 24
- A separate Wisconsin case is paused while a different appeals court reviews key questions
Tribal gaming groups had a good week in their ongoing fight against sports prediction markets.
Two separate events happened within a single day of each other. On Tuesday, the Senate failed to advance the CLARITY Act. A day later, a federal appeals court ruled against Kalshi.
Both outcomes touch on how federally regulated sports contracts interact with Tribal gaming law. Neither one ends the larger dispute, though.
Several court cases and a standoff with federal regulators are still ongoing.
Ninth Circuit Sides With California Tribes
The Ninth Circuit Court of Appeals ruled that two California Tribes are likely to win their case against Kalshi. The Tribes are Blue Lake Rancheria and Chicken Ranch Rancheria.
They argued that Kalshi’s sports contracts break the Indian Gaming Regulatory Act, known as IGRA.
The court said it looks at what an activity actually does, not what a company calls it. Judges found that Kalshi’s sports contracts count as gaming under the law when placed from Tribal land.
The panel also rejected Kalshi’s argument that other federal laws blocked the Tribes’ claim. The case now returns to the district court for further review.
Senate Vote Blocks Digital Asset Bill
The CLARITY Act is a bill meant to set rules for digital asset markets. The Senate vote on Tuesday failed 49 to 50, short of the 60 votes needed to move forward.
Tribal groups had pushed against the bill. They said it could expand federal regulator power without protecting Tribal gaming law.
The Indian Gaming Association called the vote a win for Tribal sovereignty. Gaming was not the only issue tied to the bill’s failure, though.
Ethics rules for federal officials’ digital asset holdings also played a role in the outcome.
The Commodity Futures Trading Commission remains a separate front in this fight. Tribal leaders met with CFTC Chairman Michael Selig this week.
They said the meeting fell short of the formal consultation they had asked for.
The CFTC has kept backing Kalshi’s ability to operate. In July, it stepped in after a Michigan court order affected Kalshi trades already placed.
The agency ordered Kalshi to honor those open trades. It cited rules meant to keep a single national derivatives market running smoothly.
The CFTC took similar action in August after New York filed a lawsuit against Kalshi.
More hearings are coming soon. Four Tribes in New Mexico will ask a judge to block Kalshi on September 23.
A day later, the Blue Lake case returns to court for a status conference. The Tribes there also have a pending motion to amend their complaint.
A separate case involving the Ho-Chunk Nation in Wisconsin is on hold. Kalshi and Robinhood are asking a different appeals court to review two legal questions first.
The CFTC has not said whether this week’s court ruling or Senate vote changes its position. Its recent actions in Michigan and New York still favor keeping its markets open and accessible.
