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Tribal governments are pushing a new legal challenge against sports-related prediction markets, asking courts to decide whether contracts offered by companies such as Kalshi are illegal gaming products or federally regulated commodities.
According to a JD Supra legal analysis by Blaine Green and Allan Van Vliet, the dispute now involves states, non-tribal gaming operators and Indian Tribes that say these products threaten the regulatory structure around sports betting and casino-style gaming. Prediction market companies, by contrast, argue that their event contracts are financial products governed by federal commodities law and overseen by the Commodity Futures Trading Commission.
At the center of the tribal cases is the Indian Gaming Regulatory Act, or IGRA, which divides gaming into three classes. The article says most casino-style gaming and sports betting fall within Class III, and tribes argue they have the exclusive right to offer and regulate that gaming on tribal lands under IGRA and federal criminal law.
One of the key unresolved questions is whether sports event contracts are gaming at all. Another is whether internet-based access by users located on tribal lands means the activity counts as gaming on tribal lands.
The leading appellate case cited in the article is Blue Lake Rancheria v. Kalshi. The Northern District of California denied a preliminary injunction sought by tribes, concluding that Kalshi’s online event contracts are governed by the Commodity Exchange Act and the Unlawful Internet Gambling Enforcement Act rather than IGRA, and that questions about Commodity Exchange Act compliance fall within the CFTC’s exclusive jurisdiction. The Ninth Circuit heard arguments in that appeal on July 12, 2026, where one judge reportedly said the contracts “sound like a bet.”
Other tribal cases mentioned include Ho-Chunk Nation v. Kalshi Inc. and Mescalero Apache Tribe v. Kalshi, both of which raise similar questions about whether these products are functionally sports betting when offered to people on tribal lands without tribal approval.
For Florida readers, the article’s reference to West Flagler Associates v. Haaland is notable because that case has been central to debates over where online wagers legally occur. The JD Supra piece says post-_West Flagler_ federal regulations affirmed that tribal gaming compacts can address statewide remote or internet wagering if otherwise consistent with state and federal law.
What happens next will likely turn on court rulings over classification and location: whether sports event contracts are treated as gaming, and where that gaming is deemed to take place when accessed online.
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Source: As reported by Blaine Green; Allan Van Vliet.
