The US Ninth Circuit Court of Appeals ruled in favour of two California tribes in their case against Kalshi and Robinhood. A three-judge panel partially reversed the district court's denial of a preliminary injunction and remanded the case for reconsideration.
The court found that Kalshi's sports event contracts constitute class III gaming under IGRA when conducted on tribal lands. Judges rejected Kalshi's attempt to distinguish event contracts from traditional sports betting. The ruling cited a recent Nevada case verdict: 'The essence of the sports contracts on Kalshi's platform is sports betting, no matter what Kalshi calls them.' The court added that 'only Kalshi's lexicon changes.'
The panel also dismissed the argument that exclusive jurisdiction under the Commodity Exchange Act supersedes IGRA. The court called it 'implausible' that Congress intended 'to derail all sports betting regulations built over decades by federal, state and tribal authorities'.
This is Kalshi's second loss in the Ninth Circuit in less than three weeks. Attorney Daniel Wallach noted the company has now lost before six judges across two appeals. He said this lowers Kalshi's chances of en banc review of the Nevada case. The decision may affect other tribal lawsuits against event-contract operators.
Meanwhile, a US House committee approved a tax package that restores full gambling loss deductions. The bill repeals the 90% cap introduced in 2025 and allows losses to be deducted up to 100% of winnings. The package has been sent to the House floor for a vote.
