Tunica-Biloxi tribe secures settlement as court limits Kalshi's immunity

Tunica-Biloxi deal arrives as Ninth Circuit strips Kalshi's federal shield

The district court had a clean theory: Kalshi's sports-event contracts were derivatives, federally regulated under the Commodity Exchange Act, and therefore beyond the reach of tribal gaming law. The Ninth Circuit read the same contracts and called them bets.

That word — bet — is doing substantial work now. Judge Margaret McKeown's panel found unanimously that the Blue Lake Rancheria Indians and the Chicken Ranch Rancheria of the Me-Wuk Indians were likely to succeed on their IGRA claims, reversed the denial of a preliminary injunction, and sent the case back to the district court to work through what remains. Kalshi is not currently required to stop offering contracts in California. But the federal shield it relied on — the argument that CEA preemption foreclosed any tribal or state challenge — has been removed from the table at the appellate level.

This is where I want to be precise about what the ruling does and does not establish. The Ninth Circuit has not held that IGRA governs event contracts as a categorical matter. It has held that the tribes' argument that it does is strong enough to warrant a preliminary injunction analysis. That is a meaningfully lower bar than a final judgment. The case returns to a district court that previously ruled against the tribes, with instructions to reconsider. A lot can still move.

What cannot move is the framing. Once a federal appellate court describes your product as "an act of placing a bet or wager," the regulatory vocabulary shifts permanently for every subsequent proceeding. Attorneys general who want to act, state gaming commissions looking for authority, tribes seeking injunctive relief in other circuits — they now have a circuit court opinion to cite, written by a judge known for precision in exactly this kind of jurisdictional line-drawing.

The CFTC, under Michael Selig, has maintained that the agency holds exclusive authority over federally licensed prediction markets. Scott Crowell's assessment of that position, delivered during the Indiana Gaming Association's webinar after tribal leaders left a closed-door meeting at CFTC headquarters without answers, was direct: "What credibility?" Crowell's argument is that the strategy — declining to discuss rulemaking, filing amicus briefs while promising to let courts decide, directing regulated entities to resist state court orders — has accumulated a record that the Ninth Circuit ruling now makes harder to defend.

I think the rulemaking silence is more deliberate than it looks. Agencies freeze proposed rules when they expect the final form to change materially, or when they are waiting for a litigation outcome that will determine the scope of what they can actually enforce. The CFTC received public comment on amendments to Regulation 40.11. That comment period closed. The rule did not move. The Ninth Circuit's characterization of event contracts as bets rather than derivatives creates exactly the kind of legal uncertainty that gives an agency cover to hold — or to return with a narrower rule that concedes more to IGRA's reach than the original proposal did.

I'm adjusting this read for my own bias. I tend to find the scenario where regulatory authority contracts. The upside for Kalshi is real: the case is remanded, not decided; California is not blocked; and the company has already demonstrated it can operate through extended legal uncertainty. A district court reconsidering under Ninth Circuit guidance is not the same as a district court that has been told to enjoin Kalshi.

But the direction of travel has changed. The preemption argument that made Kalshi's federal position look impregnable at the district level has been rejected at the circuit level in the jurisdiction that covers California. That matters for every state and tribal proceeding that follows, and it matters for whatever the CFTC eventually files as a final rule — assuming it files one before the political calendar changes the calculation again.