A Ninth Circuit panel spent Friday’s oral argument closely examining whether Kalshi Inc. and Robinhood Markets can keep offering sports event contracts to people located on tribal lands while the underlying lawsuit moves forward. The appeal stems from a district court decision denying a preliminary injunction requested by three California tribes in Blue Lake Rancheria, et al. v. Kalshi, Inc., et al.

Representing Blue Lake Rancheria, Chicken Ranch Rancheria and Picayune Rancheria, attorney Lester Marston argued the contracts become Class III gaming under the Indian Gaming Regulatory Act whenever someone enters into one from tribal land.

“I go on the Blue Lake Rancheria … I see a Kalshi app and I download the app,” he said. Marston then described a user placing money on a sports contract whose payout would depend on the outcome of a game.

“If it walks like a duck, it quacks like a duck,” Marston said.

A judge pointed to what appeared to be little practical difference between Kalshi’s product and a traditional sportsbook, noting Kalshi’s counsel had acknowledged the same transaction would be barred through DraftKings but allowed through Kalshi.

Tribal gaming protections dominate Kalshi Ninth Circuit appeal

Marston said the legal status changes once the activity occurs on tribal land. “The moment they come onto the reservation,” Marston argued, Kalshi is violating federal law and the civil provisions of the Indian Gaming Regulatory Act. He relied on Supreme Court precedent recognizing that conduct lawful elsewhere can become unlawful on a reservation.

He also argued tribal gaming ordinances, tribal-state compacts and the Indian Gaming Regulatory Act work together as a single regulatory system. In his view, ordinances restrict gaming unless specifically authorized, the compacts require compliance with those ordinances, and violating an ordinance therefore breaches the compact. Challengi...