A federal judge has blocked Kalshi from offering sports contracts on the lands of two Native American tribes, Blue Lake Rancheria and the Chicken Ranch Rancheria of Me-Wuk Indians, in a dispute centered on the Indian Gaming Regulatory Act (IGRA), the federal statute that governs gaming on tribal lands. The case also touches a larger question hanging over the prediction-market sector: whether federal derivatives oversight, state gambling law, or tribal law determines where sports event contracts can be offered.

Preliminary injunction with compliance deadlines

On November 4, Judge Jacqueline Scott Corley granted a preliminary injunction against Kalshi Inc. and KalshiEX covering contracts tied to football, baseball, boxing, esports and other sports. According to her ruling, the companies “are enjoined from offering on the Tribes’ Indian lands any sports contracts.”

The order applies only to the two tribes’ lands. Because a preliminary injunction is interim relief that takes effect while litigation continues, it is not a statewide ban, and it is not a final judgment. The tribes must provide boundary maps by November 13, and Kalshi must submit information about its compliance within 21 days — filings that will show how the restriction is put into practice.

Why the Ninth Circuit called the trades Class III gaming

In a September 16 opinion, Ninth Circuit Judge M. Margaret McKeown, writing for a panel that believed the tribes will prevail in the matter, defined Kalshi’s sports contracts as Class III gaming — the casino-style category that includes sports betting. Because the transactions took place on tribal lands, the panel found the activity falls under IGRA’s jurisdiction. Neither the tribes’ gaming ordinances nor their federally approved secretarial procedures allowed Kalshi to offer sports contracts on their lands.

“IGRA governs class III gaming activity located on Indian lands,” McKeown wrote.

Although the Commodity Exchange Act (CEA) gives the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over covered derivatives trading, the court found the CEA does not preempt IGRA’s provisions. The panel also upheld the dismissal of a Lanham Act advertising claim. In practical terms, the preemption holding means a derivatives classification under federal law does not by itself clear gaming-law restrictions on tribal land.

CFTC wants the contracts called swaps; states disagree

On October 9, the CFTC put forward a proposal to declare event contracts as swaps, though the regulation has yet to be finalized. CFTC Chairman Michael S. Selig has maintained that event contracts, whether pertaining to sports or other events, function as commodity derivatives under the agency’s jurisdiction per the Commodity Exchange Act.

In July, representatives of 44 states sent a letter to the CFTC stating that sports betting does not qualify as swaps or futures, and voiced disapproval of federal attempts to override state gambling laws.

That split over classification is the same underlying question running through the tribal litigation: regulators at the federal, state and tribal levels do not agree on which framework governs sports event contracts.

What the trading data shows

Data from Artemis puts one-year prediction-market trading volume at $451.8 billion as of November 6, with sports contracts accounting for $177.9 billion, or 39.4%. At Kalshi, sports contracts contributed $133.1 billion of the platform’s $366.5 billion total, a 36.3% share. A separate monthly series puts October trading at $123.6 billion. These figures measure trading volume, not revenue. The shares do, however, indicate the scale of the product category the tribes challenged in court.

Separately, Cryptopolitan reported Utah’s lawsuit against Kalshi and two Susquehanna firms, bringing market makers into the legal dispute.

Europe leans on binary-option rules; parts of Asia see gambling

In July guidance, the European Securities and Markets Authority (ESMA) said event contracts qualifying as financial derivatives face existing binary-option restrictions on retail sales, and that firms also need investment-firm authorization to distribute them to non-retail clients.

Across Asia, Tiger Research analyst Ryan Yoon noted that many regulators still treat prediction markets as gambling, though he argued that their data could also be used responsibly.

The divergent approaches underline that there is no single international playbook for event contracts, so the rules a platform faces depend on the jurisdiction.

Geofencing, boundaries and the cost of compliance

The boundary maps due November 13 will establish where Kalshi must restrict sports contracts. Enforcing those boundaries may require more precise geofencing — technology that blocks access based on users’ locations. Divergent tribal, state and international rules could increase compliance costs and limit market access.

For now, these remain potential consequences, not evidence of a measurable global market reaction.