Why the Ninth Circuit's Kalshi Decision Matters More for Antitrust Than for Sports Betting
Blue Lake Rancheria v. Kalshi rejected the claim that a CFTC license immunizes sports contracts from every other law. The reasoning reaches well past gambling.
On January 22, 2025, a derivatives exchange called KalshiEX LLC sent the Commodity Futures Trading Commission a notice. It would begin listing a contract that asked, of a named team and a named title, "Will <team> win <title>?"[^1] The notice was a self-certification. Under the Commodity Exchange Act, an exchange the Commission has designated as a contract market may list a new product by certifying that the product complies with the Act, and the product then trades unless the Commission steps in.[^2] The Commission did not step in. By the following football season, a person in California with a Robinhood account could stake money on whether the 49ers would win by more than 4.5 points, whether the game's combined score would exceed 49.5, and whether Brock Purdy would pass for over 200 yards, and could stack all three into a single wager.[^3]
Twenty-six months earlier, California voters had been asked whether they wanted online sports betting. Proposition 27 would have legalized it. It failed with 82 percent of the vote against, after a campaign in which supporters led by FanDuel, DraftKings, and BetMGM raised $169 million and opponents led by the state's gaming tribes raised $249 million.[^4] Proposition 26, which would have allowed sports betting in person at tribal casinos and racetracks, failed in every county.[^5] Sports betting stayed a crime in California under the Penal Code.[^6] Kalshi's self-certification delivered to every Californian with a phone the product the voters had refused, and it did so without a vote, a statute, a compact, or a rulemaking.
On September 16, 2026, the Ninth Circuit decided Blue Lake Rancheria v. Kalshi, Inc. and held that two California tribes are likely to succeed in enjoining Kalshi's sports contracts on their lands under the Indian Gaming Regulatory Act.[^7] The opinion is written as a case about tribal gaming and federal preemption, and it is one. It is also the clearest account any court has yet given of a strategy for acquiring power over a market by choosing one's regulator, and of why the body of law we call competition law has nothing to say about it. The panel gave the strategy a name. The section of the opinion describing Kalshi's business is headed "Kalshi and Its Gambit."[^8]
What the gambit is
Kalshi's structure has three parts. Each is lawful on its own terms.
The first part is the license. Kalshi is a designated contract market, a status the Act confers on an exchange that satisfies twenty-three core principles, and one that carries with it the right to self-certify new products.[^9] The Dodd-Frank Act added a special rule for event contracts. The Commission "may determine" that contracts involving "activity that is unlawful under any Federal or State law," terrorism, assassination, war, or "gaming" are "contrary to the public interest," and a contract so determined may not be listed.[^10] The Commission's own regulation is stricter than the statute. Rule 40.11 provides that a registered entity "shall not list for trading" a contract that "involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law."[^11] In June 2024 the Commission proposed to define "gaming" to include "the staking or risking of something of value upon the outcome of a game in which one or more athletes compete."[^12] That proposal was never adopted. In January 2025 Kalshi certified sports contracts anyway. The Commission let them trade, and by the time the question reached the Ninth Circuit the Commission had joined Kalshi in court to argue that its own rule did not mean what it said.[^13]
The second part is the jurisdictional claim. The Act gives the Commission "exclusive jurisdiction" over "accounts, agreements . . . and transactions involving swaps or contracts of sale of a commodity for future delivery . . . traded or executed on a contract market designated pursuant to section 7."[^14] Kalshi reads its sports contracts as swaps, reads the exclusive-jurisdiction clause as ousting every other authority, and concludes that no state gambling law, no tribal ordinance, and no other federal statute can reach a contract on its exchange. The Unlawful Internet Gambling Enforcement Act supplies a supporting piece, because it excludes from its definition of "bet or wager" any transaction "conducted on or subject to the rules of a registered entity."[^15] Assembled, the pieces convert a sports bet into a swap, a swap into a transaction within the Commission's exclusive jurisdiction, and the Commission's exclusive jurisdiction into a boundary that no other sovereign may cross.
The third part is the remedy, and it is the part that matters most for what follows. Pressed on what anyone harmed by its contracts could do about them, Kalshi told the Ninth Circuit that if the tribes "have any ability to challenge the C[ommission's] regulation of Kalshi—which is highly doubtful—[t]he proper vehicle to make such a challenge would be via an Administrative Procedure (APA) action against the C[ommission], not an IGRA lawsuit against Kalshi."[^16] The panel drew out the consequence: "Taken to its logical conclusion, this carveout would leave Kalshi's activity on Indian lands outside the federal courts' reach."^17 The firm's position, stated plainly, is that the only lawful way to contest what it does is to sue the agency it selected, over that agency's decision not to act.
More than ninety percent of Kalshi's trades in 2025, and ninety-five percent of its revenue, were sports related.[^18] The gambit is the business.
The structure it collided with
The tribes' side of the case rests on an arrangement that is older and that was built in public.
Congress enacted IGRA in 1988 to provide "a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments."[^19] The statute divides gaming into three classes and puts the most lucrative, class III, under a regime of tribal-state compacts: class III gaming on Indian lands is lawful "only if" it is authorized by a tribal ordinance, located in a state that permits such gaming, and conducted in conformance with a compact.[^20] The Ninth Circuit later described what that regime created in competitive terms. Class III gaming could be "a source of substantial revenue for the Indian tribes and a significant rival for traditional private sector gaming facilities."[^21]
California's part of the arrangement was made by its voters. In March 2000 they ratified Proposition 1A, which amended the state constitution to authorize the Governor "to negotiate and conclude compacts, subject to ratification by the Legislature, for the operation of slot machines and for the conduct of lottery games and banking and percentage card games by federally recognized Indian tribes on Indian lands in California in accordance with federal law."[^22] The Ninth Circuit described the resulting bargain in 2003, and the Blue Lake panel quoted the description: at the core of California's compacts lies "the exclusive right to conduct . . . Las Vegas-style class III gaming, free from non-tribal competition."[^23] The card clubs and charities that challenged that exclusivity on equal protection grounds lost.[^24]
Blue Lake Rancheria and Chicken Ranch Rancheria hold about 26 and 40 acres of trust and fee land, in Humboldt and Tuolumne Counties.[^25] They gamed under the 1999 compact until California, in negotiating its successor, demanded family law, environmental, and tort provisions unrelated to gaming. The tribes sued, and in 2022 the Ninth Circuit held that the state had failed to negotiate in good faith.[^26] IGRA's remedial ladder then ran its course: a court-appointed mediator selected the tribes' proposal, the state declined to consent, and in January 2024 the Secretary of the Interior prescribed procedures that function as compacts.[^27] The procedures incorporate each tribe's gaming ordinance, and each ordinance provides that "[a]ll gaming activities on the Rancheria (whether Class I, II, or III) are prohibited except as expressly authorized" under it.[^28]
That is the structure Kalshi's contracts entered when a patron on the floor of the Blue Lake Casino Hotel opened the app.
What the court held
Judge McKeown, writing for a unanimous panel that included Chief Judge Murguia and Judge Paez, reversed the denial of a preliminary injunction on the IGRA claim and remanded for the remaining factors.[^29] The reasoning ran in four steps, and each step refused a substitution of vocabulary for substance.
The contracts are class III gaming. IGRA's residual definition of class III reaches "all forms of gaming that are not class I gaming or class II gaming," and the National Indian Gaming Commission's regulations list "[a]ny sports betting and parimutuel wagering" within it.[^30] The analysis, the panel said, "is functional. IGRA does not ask whether the operator labels the product a bet or an event contract, or something else. It asks what the activity looks like."[^31] The court then supplied the comparison that will be quoted in every later case: "Imagine a user standing on the floor of the Blue Lake Casino Hotel who downloads Kalshi and DraftKings, a classic online sports betting app. On Kalshi, she buys a $100 contract that pays if the San Francisco Giants win. On DraftKings, she wagers $100 on the same outcome. The bettor, the place, the stake, and the contingency remain the same. The only thing that changes is Kalshi's vocabulary."[^32] The conclusion followed: "Kalshi may reshuffle the cards, but it cannot change the hand: Its sports event contracts are class III gaming."^33
The gaming is located on Indian lands. IGRA does not require that the activity take place exclusively there. Because "the act of placing a bet or wager" is the gaming activity, a patron who enters a contract from tribal territory conducts gaming on tribal territory, "even if Kalshi's infrastructure operates elsewhere."[^34]
A nonparty can violate a compact. Kalshi argued that it signed no compact and no procedures, and so could not be bound by either. The panel located the error in a category mistake: "At the heart of Kalshi's proposed interpretation of IGRA lies the revisionist view that 'Tribal-State compact' means 'contract.'"[^35] The statute limits who may sue (tribes and states) and what may be enjoined (class III gaming activity), "[b]ut it did not limit which entities may be enjoined."[^36] A compact, like an interstate compact, is "the legislative means" by which sovereigns adapt their treaty power, and its provisions are "binding upon the citizens of each State."[^37]
The Commission's exclusive jurisdiction does not displace IGRA. This is the holding that reaches beyond tribal law. The panel had held three weeks earlier, in KalshiEX, LLC v. Assad, that Kalshi's sports contracts "are likely not swaps under the CEA," which by itself takes them outside the exclusive-jurisdiction clause.[^38] But the court went on to say that it "would be compelled to reverse even if Kalshi's event contracts were categorized as swaps."[^39] The Supreme Court explained in 1982 that the clause was "intended only to consolidate federal regulation of commodity futures trading in the Commission" and "to separate the functions of the Commission from those of the [SEC] and other regulatory agencies."[^40] The clause's own text says that "nothing" in it "supersede[s] or limit[s]" the jurisdiction of federal courts.[^41] And where Congress meant to displace other law, it said so: the Act "supersede[s] and preempt[s] the application of any State or local law that prohibits or regulates gaming," but nothing in it displaces another federal statute.[^42] "The phrase 'exclusive jurisdiction' is not a broad grant to the Commission of control over all commodities-related matters to the exclusion of all other federal laws."[^43]
The panel then reached for an analogy from the one field it had otherwise left alone. Section 2 of the CEA, it wrote, "does not create a roving exemption from every other federal statute that may apply to the same conduct for a different reason. For example, the fact that market activity is regulated by the SEC does not prevent application of the antitrust laws. Even where conduct lies in the heartland of an expert federal regulator's authority, another federal statute is displaced only when the two are 'clearly incompatible.'"[^44] The source of that standard is Credit Suisse Securities (USA) LLC v. Billing, the Supreme Court's leading modern statement of when a regulatory scheme confers implied antitrust immunity.[^45] The panel borrowed the test from the case that immunized securities underwriters and used it to deny Kalshi its immunity. It then quoted its own conclusion from Assad: it is "implausible that Congress took 'a wrecking ball to all sports gambling regulations built up over decades by federal, state, and tribal governments when it amended the CEA to add the definition of swap.'"[^46]
What competition law would say
Now set the opinion beside the field that claims jurisdiction over markets.
The market is California sports wagering. Its structure is entirely a product of law. Until 2018 a federal statute barred states from authorizing sports betting, and the Supreme Court's decision striking that statute returned the question to each state.[^47] Congress had already declared, in another context, that "the States should have the primary responsibility for determining what forms of gambling may legally take place within their borders."[^48] California answered through its constitution, its Penal Code, and two ballot measures. The answer was a tribal exclusivity over casino gaming and no sports betting at all.
Into that market came a firm offering the product the incumbents were forbidden to offer, with a distribution partner reaching "nearly anywhere in the United States."[^49] Antitrust has a word for this. The word is entry, and the field regards it as the thing most to be encouraged. The consumer welfare standard asks whether prices rose or output fell. Neither happened. Californians who wanted to wager got to wager. The parties complaining are the holders of a legal monopoly, and the American Gaming Association, whose members hold casino and sportsbook licenses in other states, appears among the amici.[^50] Under the doctrine as it stands, a lawsuit by incumbents to exclude a rival is the paradigm of harm to competitors, which the field has spent fifty years distinguishing from harm to competition. A Sherman Act claim against Kalshi would have had no plausible theory of harm to competition, and none was filed.
California's own competition statute produces the same blindness by a different route. The Unfair Competition Law reaches "unlawful, unfair or fraudulent" business acts, and a tribe or card club could invoke it.[^51] But when a competitor invokes the "unfair" prong, the California Supreme Court has confined the word to "conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition."[^52] A complaint that a rival entered a closed market by relabeling its product does not describe harm to competition in that sense. It describes competition. The "unfair" prong, tethered to antitrust policy, cannot see the wrong, and a plaintiff has to rebuild the claim under the "unlawful" prong on a Penal Code section written for bookmakers.
This is the interference fallacy in its antitrust form. The field measures interference with price and output, and it registers Kalshi's entry as a gain on both. What it cannot register is the thing the Ninth Circuit spent twenty pages deciding: who holds the standing power to set the terms on which wagering happens in California, and whether that power can be acquired by choosing a regulator.
Two monopolies, and the difference between them
The domination test asks whether a party holds power over others that is asymmetric, arbitrary, and standing.[^53] Run it on both sides of this case and it returns the same answer for the first and third markers. The tribes' exclusivity is a standing power over the terms of casino gaming in California, held by a few sovereigns over everyone else. Kalshi's national position is a standing power over the terms of sports wagering in every state, held by one firm and its distribution partner over fifty legislatures and several hundred tribes. Both are concentrated. Both persist whether or not exercised. A test that stopped at bigness would condemn both, or, if it preferred entrants to incumbents, would condemn the tribes.
The second marker is where the two part. Arbitrary power is power uncontrolled by the will of those subject to it or by any accountable check, and the measure of it is contestability.[^54]
The tribal exclusivity was created by a vote. Proposition 1A was passed by the Legislature in 1999 and ratified by the electorate in 2000.[^55] It was reaffirmed by a vote when Propositions 26 and 27 failed in 2022. It is structured by a federal statute that imposes a duty of good-faith negotiation on the state, provides a remedial ladder when the state fails, and subjects the result to a federal agency's approval.[^56] The tribes in this case did not receive their gaming rights from anyone's forbearance. They litigated for them for years, won a published holding that the state had negotiated in bad faith, and obtained procedures through a mediator and the Secretary of the Interior.[^57] Any Californian can contest the arrangement through the initiative, as the sportsbooks did in 2022. The state can contest it in the next compact negotiation. The tribes' power is standing, and it is asymmetric, and it is answerable at every point to a process its subjects can enter.
Kalshi's exclusivity was created by a filing. It was ratified by the Commission's decision not to initiate the ninety-day review the statute and its own rule provide for.[^58] It is defended on the theory that the decision not to act is reviewable only in an action against the agency that made it. That is the meaning of the passage at page 31 of the opinion. Kalshi's argument about the APA was offered as a point about jurisdiction, and it was answered as one. Read as a claim about power, it is a claim that the only check on the firm's conduct runs through a checkpoint the firm selected, staffed by an agency that has appeared in court on the firm's side.[^59] Power subject to no check but one chosen by its holder is the definition of arbitrary power. The domination test distinguishes the two monopolies in a single move, and it does so on the ground the Ninth Circuit itself treated as decisive, which is whether anyone but the Commission may say what Kalshi's contracts are.
The point can be put in Robert Hale's terms. Both exclusivities are creatures of state coercion. The tribes' rests on a constitutional amendment and a federal statute. Kalshi's rests on a designation order, a self-certification provision, and a preemption clause. The libertarian framing of the dispute, innovation against protectionism, treats the first as state interference and the second as the market, when both are legally constructed entitlements and the difference between them is how much public process went into their construction.[^60] The one with the most process is the one Kalshi's argument would nullify. The one with the least is the one it would make unreviewable.
Kalshi's defenders have a better argument than that framing, and it should be stated at full strength. Prediction markets aggregate information, and contracts on public events can carry real economic meaning. State gambling laws are often protectionist, and tribal exclusivity is a rent, extracted from consumers who would rather wager with someone else. If California's voters were wrong in 2022, the $249 million spent on the tribes' side had something to do with it.[^61] All of that may be true. None of it was decided in Kalshi's favor by anyone with authority to decide it. The case for online sports betting in California was made to the electorate, at great expense, and it lost. It can be made again. The purpose of the gambit is to avoid having to make it, and a legal order that lets a firm route around a public decision by relabeling the product and picking a friendlier agency has ceased to treat the decision as public.
There is a broader lesson, and the Ninth Circuit's "roving exemption" line is its doctrinal form.[^62] Regulator selection is available to any firm whose product can be described in two vocabularies. A worker is also a contractor. A bank deposit is also a stablecoin. A wager is also a derivative. Each redescription points toward a different agency with a different mandate, and a firm that chooses well acquires a license from a body that does not enforce against the harm the other vocabulary names. The consumer welfare standard cannot object, because the redescription lowers prices or expands output or both. The domination test objects, because the redescription's purpose and effect is to place the firm's power beyond the reach of everyone but its chosen supervisor. The Ninth Circuit's answer, that a license from one regulator is a license to be regulated by that regulator and nothing more, is the right answer, and the domination test says why.
The coda: an advertisement no one can challenge
The opinion ends with a holding that shows the same strategy operating on a smaller scale.
Kalshi advertised that "Sports Betting [Is] Legal in all 50 States on Kalshi," and the tribes sued under the Lanham Act.[^63] The Ninth Circuit held that the advertisement is an "inactionable" statement of opinion, under a 1999 rule that "[a]bsent a clear and unambiguous ruling from a court or agency of competent jurisdiction, statements by laypersons that purport to interpret the meaning of a statute or regulation are opinion statements, and not statements of fact."[^64] The proof that the law was unsettled was a string citation to Kalshi's own cases in the Third, Sixth, and Ninth Circuits and the District of Maryland and Southern District of New York.[^65]
So the same panel, in the same opinion, held that Kalshi's product is likely unlawful class III gaming on tribal land in California and that an advertisement calling it legal in all fifty states cannot be touched. The rule rewards the firm that litigates hardest. Each suit Kalshi files against a state makes the law of that state less settled, and each unsettled state extends the shield around the advertisement. The panel had noticed the pattern a few pages earlier, where it observed that "[i]n this court, Kalshi studiously wraps its product in the language of derivatives. Its advertising is less coy."[^66] The gambit's last move is the power to describe the legal status of one's own product to consumers, immune from challenge because one is contesting it.
Who enforced, and who did not
The plaintiffs who stopped the product in California hold 66 acres between them. They sued under a federal statute with a cause of action limited to tribes and states.[^67] The state whose Penal Code makes the product a crime, whose voters rejected it, and whose Attorney General runs the Bureau of Gambling Control appears in the case on the amicus list, alongside Massachusetts, twenty-five other states, and the District of Columbia.[^68] Massachusetts sued Kalshi in its own courts in September 2025 and obtained a preliminary injunction in January 2026.[^69] Connecticut sued in August 2026.[^70] California has filed briefs in other states' cases.[^71]
The instrument is available. The Unfair Competition Law's fraudulent prong requires no "representation of fact," and its unlawful prong now has a Penal Code predicate the Ninth Circuit has all but supplied. Even on Kalshi's broadest reading of the CEA's preemption clause, Congress spared "antifraud provisions of general applicability."[^72] The Attorney General, a district attorney, or the city attorney of a large city may sue without showing injury and may recover civil penalties for each violation.[^73] No one has.
That silence is part of the same structure. A market closed by law and opened by a filing stays open when the sovereign that closed it declines to defend the closure, and private enforcement by the parties with the most at stake substitutes for the public enforcement that would carry penalties. The enforcement gap is a subject for another essay. Here it is enough to note that the domination in this case was contested at all only because Congress, in 1988, gave a private party standing to contest it.
What follows
Three things are pending, and each will test whether the Ninth Circuit's answer holds.
New Jersey has asked the Supreme Court to review the Third Circuit's decision, and the split between Flaherty and Assadis square.[^74] The Fourth Circuit's decision in the Maryland case is due. And the Commission has proposed to replace Rule 40.11's categorical bar with a contract-by-contract public interest review, which would convert the agency's silence into a procedure and give the gambit a regulation to stand on.[^75]
The Supreme Court's question, if it takes the case, will be whether a sports contract is a swap. That question has a textual answer, and in my view the Ninth Circuit's reading is the better one, because a definition that turns on the "occurrence" of an event must mean something narrower than a bet on the event's result, or every contest anywhere becomes a commodity.[^76] But the swap question is a proxy. Whichever way it goes, the question underneath it is whether a license from one federal agency can make a firm's power over a market uncontestable by every other sovereign, including the voters of the state where the market sits. Antitrust cannot ask that question, because its instruments register Kalshi's arrival as a benefit. Preemption doctrine can ask it only indirectly, through a presumption about the historic police powers of the states that the Third Circuit's majority declined to apply.[^77] The domination test asks it directly, and it supplies the distinction the case turns on: between a standing power that answers to a public process and a standing power that answers only to its own chosen regulator. The Ninth Circuit reached that distinction without naming it. Naming it is what a theory of freedom is for.
Footnotes
[^1]: Commodity Futures Trading Comm'n, Kalshi Notification Regarding the Initial Listing (Jan. 22, 2025), https://www.cftc.gov/sites/default/files/filings/ptc/25/01/ptc01222514045.pdf (certifying sports event contracts posing the question "Will <team> win <title>?"), cited in Blue Lake Rancheria v. Kalshi, Inc., No. 25-7504, slip op. at 18 (9th Cir. Sept. 16, 2026) (describing the initial self-certification).
[^2]: 7 U.S.C. § 7a-2(c)(1) (2018) (permitting a registered entity to list a new contract by providing "a written certification that the new contract or instrument . . . complies with this chapter"); 17 C.F.R. § 40.2 (2025) (setting the self-certification requirements); Blue Lake, slip op. at 17 (explaining that "[t]he self-certified contracts go forward unless the Commission steps in").
[^3]: Blue Lake, slip op. at 16-17 (describing point-spread, total, and player-proposition contracts and the "combos" that stack them).
[^4]: California Proposition 27, Legalize Sports Betting and Revenue for Homelessness Prevention Fund Initiative (2022), Ballotpedia, https://ballotpedia.org/California_Proposition_27,Legalize_Sports_Betting_and_Revenue_for_Homelessness_Prevention_Fund_Initiative(2022) (reporting 1,906,339 votes in favor and 8,849,200 against, and reporting $169.1 million raised in support and $249.3 million in opposition, led by Betfair Interactive (FanDuel), Crown Gaming (DraftKings), and BetMGM on one side and the San Manuel Band, Graton Rancheria, and Pechanga Band on the other).
[^5]: 2022 California Proposition 26, Wikipedia, https://en.wikipedia.org/wiki/2022_California_Proposition_26 (reporting 3,514,597 votes in favor and 7,129,127 against, and noting that the measure failed in every county).
[^6]: Cal. Penal Code § 337a(a)(6) (West 2025) (criminalizing the making or accepting of bets on the result of any contest); see Blue Lake, slip op. at 16 (citing the section for the proposition that sports betting is illegal in California).
[^7]: Blue Lake Rancheria v. Kalshi, Inc., No. 25-7504, slip op. at 9 (9th Cir. Sept. 16, 2026) (reversing the denial of a preliminary injunction on the IGRA claim, affirming the denial as to the Lanham Act claim, and remanding).
[^8]: Id. at 15.
[^9]: 7 U.S.C. § 7(d) (2018) (setting out the core principles for contract markets); Blue Lake, slip op. at 17 (explaining that "[a]ll authorized DCMs may either self-certify event contracts or can decide to request the Commission's preapproval for a given contract").
[^10]: 7 U.S.C. § 7a-2(c)(5)(C)(i)-(ii) (2018) (authorizing the Commission to determine that event contracts involving unlawful activity, terrorism, assassination, war, or gaming are contrary to the public interest, and providing that no contract so determined "may be listed or made available for clearing or trading on or through a registered entity").
[^11]: 17 C.F.R. § 40.11(a)(1) (2025) (providing that a registered entity "shall not list for trading or accept for clearing" a contract based on an excluded commodity "that involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law").
[^12]: Event Contracts, 89 Fed. Reg. 48968, 48976 (proposed June 10, 2024) (to be codified at 17 C.F.R. pt. 40) (proposing that "the staking or risking of something of value upon the outcome of a game in which one or more athletes compete" would constitute gaming under the amended rule).
[^13]: KalshiEX, LLC v. Assad, No. 25-7516, slip op. at 34 (9th Cir. Aug. 28, 2026) (observing that "Kalshi, joined now by the CFTC, misreads the regulation" and concluding that "[t]he CFTC's contrary view is not entitled to deference" under Loper Bright). The Commission's litigation position followed a change in its posture toward the company. A week before the presidential inauguration in January 2025, Kalshi named Donald Trump Jr. as an adviser. On February 12, 2025, the President nominated Brian Quintenz, a Kalshi board member, to chair the Commission. On May 5, 2025, the Commission voluntarily dismissed its appeal in the D.C. Circuit challenging Kalshi's election contracts. The White House withdrew the Quintenz nomination on September 30, 2025. See CFTC Bows Out of Election Betting Appeal Against Kalshi, iGaming Bus. (May 5, 2025), https://igamingbusiness.com/legal-compliance/cftc-dismissal-appeal-kalshi-election-betting/ (reporting the dismissal, the Trump Jr. appointment, and the Quintenz nomination); White House Withdraws Pro-Crypto Brian Quintenz's Name From CFTC Chair Nomination, CoinDesk (Sept. 30, 2025), https://www.coindesk.com/policy/2025/09/30/white-house-withdraws-brian-quintenz-s-name-from-cftc-chair-nomination (reporting the withdrawal).
[^14]: 7 U.S.C. § 2(a)(1)(A) (2018) (conferring exclusive jurisdiction on the Commission over covered transactions on designated contract markets), quoted in Blue Lake, slip op. at 33-34.
[^15]: 31 U.S.C. § 5362(1)(E)(ii) (2018) (excluding from the definition of "bet or wager" "any transaction conducted on or subject to the rules of a registered entity or exempt board of trade under the Commodity Exchange Act"); Blue Lake, slip op. at 31 (describing the inferential chain Kalshi builds on the carveout).
[^16]: Blue Lake, slip op. at 31 (quoting Kalshi's brief).
[^18]: Assad, slip op. at 14 (finding that "[o]ver 90% of Kalshi's trades in 2025, representing 95% of its revenue, were sports related"); see also Blue Lake, slip op. at 17 (noting that "[t]rading data suggests that up to 90 percent of Kalshi's trading volume comes from sports").
[^19]: 25 U.S.C. § 2702(1) (2018) (stating the statute's purpose); see also 25 U.S.C. § 2701(5) (2018) (finding that tribes have "the exclusive right to regulate gaming activity on Indian lands" where the gaming is not prohibited by federal law or by the state).
[^20]: 25 U.S.C. § 2710(d)(1)(A)-(C) (2018) (conditioning lawful class III gaming on a tribal ordinance, a permitting state, and conformance with a compact); Blue Lake, slip op. at 10-11 (describing the three classes and the compact regime).
[^21]: In re Indian Gaming Related Cases, 331 F.3d 1094, 1097 (9th Cir. 2003) (quoting Flynt v. Cal. Gambling Control Comm'n, 129 Cal. Rptr. 2d 167, 174 (Ct. App. 2002)) (describing class III gaming as "a source of substantial revenue for the Indian tribes and a significant rival for traditional private sector gaming facilities").
[^22]: Cal. Const. art. IV, § 19(f) (authorizing the Governor to negotiate and conclude class III compacts); Artichoke Joe's Cal. Grand Casino v. Norton, 353 F.3d 712, 720-21 (9th Cir. 2003) (quoting the text added by Proposition 1A and noting that voters ratified it in March 2000); In re Indian Gaming Related Cases, 331 F.3d at 1106 (noting that the Legislature passed Proposition 1A on September 10, 1999 and that voters ratified it on March 7, 2000).
[^23]: Blue Lake, slip op. at 10 (quoting Artichoke Joe's, 353 F.3d at 723, which in turn quotes In re Indian Gaming Related Cases, 331 F.3d at 1104).
[^24]: Artichoke Joe's, 353 F.3d 712 (affirming summary judgment against card clubs and charities that challenged Proposition 1A and the compacts under IGRA and the Equal Protection Clause).
[^25]: Blue Lake, slip op. at 13 (describing the rancherias).
[^26]: Chicken Ranch Rancheria of Me-Wuk Indians v. California, 42 F.4th 1024, 1029-30, 1049 (9th Cir. 2022) (holding that California failed to negotiate in good faith by demanding family law, environmental, and tort provisions unrelated to gaming); Blue Lake, slip op. at 14 (recounting the negotiations).
[^27]: Blue Lake, slip op. at 14 & n.3 (describing the mediator's selection, the state's refusal, and the Secretary's January 31, 2024 procedures); see 25 U.S.C. § 2710(d)(7)(B)(iii)-(vii) (2018) (setting out the remedial process).
[^28]: Blue Lake, slip op. at 27-28 (quoting the Chicken Ranch ordinance and noting that the Blue Lake ordinance contains an identical provision).
[^29]: Id. at 9, 38.
[^30]: 25 U.S.C. § 2703(8) (2018) (defining class III gaming); 25 C.F.R. § 502.4(c) (2025) (listing sports betting and parimutuel wagering as class III gaming); Blue Lake, slip op. at 22 (applying both).
[^31]: Blue Lake, slip op. at 23.
[^32]: Id. at 24.
[^34]: Id. at 24-25, 33 (reasoning from California v. Iipay Nation of Santa Ysabel, 898 F.3d 960, 967 (9th Cir. 2018), that "the act of placing a bet or wager" is the gaming activity and that "a Kalshi consumer can still enter an event contract on Indian lands if she purchases one while on a reservation").
[^35]: Id. at 29.
[^36]: Id. at 26.
[^37]: Id. at 30 (quoting Hinderlider v. La Plata River & Cherry Creek Ditch Co., 304 U.S. 92, 104, 106 (1938)).
[^38]: Assad, slip op. at 41 (concluding "that these sports event contracts are likely not swaps under the CEA"); see alsoid. at 15-16 (distinguishing the "occurrence of an event," such as whether the Super Bowl happens, from the outcome of the event, such as which team wins it); Blue Lake, slip op. at 34 (applying Assad and concluding that Kalshi's exclusive-jurisdiction argument "fails at the outset").
[^39]: Blue Lake, slip op. at 35.
[^40]: Id. (quoting Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 386-87 (1982)); see Curran, 456 U.S. at 386 (explaining that "[t]he purpose of the exclusive jurisdiction provision in the bill passed by the House was to separate the functions of the Commission from those of the Securities and Exchange Commission and other regulatory agencies").
[^41]: Blue Lake, slip op. at 35 (quoting 7 U.S.C. § 2(a)(1)(A)).
[^42]: Id. at 36 (quoting 7 U.S.C. § 16(e)(2) and contrasting 7 U.S.C. § 16(e)(1)(B)(i)). The panel's quotation of § 16(e)(2) omits the clause's own limits. The full text preempts "any State or local law that prohibits or regulates gaming or the operation of bucket shops (other than antifraud provisions of general applicability)," and it does so only "in the case of" an electronic trading facility excluded under § 2(e) and agreements excluded under §§ 2(c), 2(f), or 27 to 27f, or exempted under § 6(c). 7 U.S.C. § 16(e)(2) (2018). A contract listed on a designated contract market is none of those. The Third Circuit, for its part, rested its preemption holding on field and conflict preemption. See KalshiEX LLC v. Flaherty, No. 25-1922, slip op. at 10 (3d Cir. Apr. 6, 2026) (defining the preempted field as "the regulation of trading on a DCM (a form of futures trading) rather than as gambling").
[^43]: Blue Lake, slip op. at 35.
[^44]: Id. at 37.
[^45]: Credit Suisse Sec. (USA) LLC v. Billing, 551 U.S. 264, 275-76 (2007) (holding that the securities laws implicitly precluded antitrust claims against underwriting syndicates and identifying as the relevant factors the existence of regulatory authority, "evidence that the responsible regulatory entities exercise that authority," the risk of conflicting guidance, and whether the conduct lies within the heartland of the regulated activity). The second factor deserves notice here. In Credit Suisse the SEC actively supervised the challenged practices. In this case the Commission's authority over gaming contracts was exercised by declining to invoke it, and the Commission then defended the non-exercise in court. See Assad, slip op. at 34.
[^46]: Blue Lake, slip op. at 36-37 (quoting Assad, slip op. at 40-41).
[^47]: Murphy v. Nat'l Collegiate Athletic Ass'n, 584 U.S. 453 (2018) (holding that the Professional and Amateur Sports Protection Act's prohibition on state authorization of sports gambling violated the anticommandeering rule).
[^48]: 15 U.S.C. § 3001(a)(1) (2018) (finding, in the Interstate Horseracing Act, that "the States should have the primary responsibility for determining what forms of gambling may legally take place within their borders").
[^49]: Blue Lake, slip op. at 15 (describing the Robinhood partnership).
[^50]: Id. at 5 (listing the American Gaming Association among the amici).
[^51]: Cal. Bus. & Prof. Code § 17200 (West 2025) (defining unfair competition to include "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising").
[^52]: Cel-Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 187 (1999) (defining "unfair" for purposes of a competitor's claim under section 17200).
[^53]: J.R. Howell, The Interference Fallacy, The Am. Counsel (2026) (proposing the domination test and identifying asymmetry, arbitrariness, and standing as its three markers); see generally Philip Pettit, Republicanism: A Theory of Freedom and Government (1997) (defining freedom as the absence of domination); Frank Lovett, A General Theory of Domination and Justice (2010) (defining domination as dependence on arbitrary power).
[^54]: See Philip Pettit, On the People's Terms: A Republican Theory and Model of Democracy (2012) (arguing that power is non-arbitrary to the extent it is subject to the contestatory control of those it affects).
[^55]: See supra note 22.
[^56]: 25 U.S.C. § 2710(d)(3)(A) (2018) (requiring the state to "negotiate with the Indian tribe in good faith"); id. § 2710(d)(7)(B) (providing the remedial process); id. § 2710(d)(2)(A)-(C) (requiring the National Indian Gaming Commission's approval of the tribal ordinance); Blue Lake, slip op. at 12-13 (describing Congress's "backstop against interminable negotiations").
[^57]: See supra notes 26-27.
[^58]: 7 U.S.C. § 7a-2(c)(5)(C)(iv) (2018) (requiring final action within ninety days of the commencement of review); 17 C.F.R. § 40.11(c) (2025) (permitting the Commission to subject a submission to a ninety-day review). The Commission's decision not to initiate review is inferred from the fact that the contracts have traded since January 2025 and from the Commission's subsequent litigation posture. No published order declining review has been located.
[^59]: Assad, slip op. at 6, 34 (listing counsel for the Commission and describing the Commission as having joined Kalshi's reading of Rule 40.11).
[^60]: Robert L. Hale, Coercion and Distribution in a Supposedly Non-Coercive State, 38 Pol. Sci. Q. 470 (1923) (arguing that property and contract entitlements are enforced through state coercion, so that the distribution of market liberty is a distribution of legally constructed power).
[^61]: See supra note 4.
[^62]: Blue Lake, slip op. at 37.
[^63]: Id. at 8, 18-19 (reproducing the advertisement, which also stated, "Breaking News: You can now bet on sports in all 50 states with Kalshi").
[^64]: Id. at 37-38 (quoting Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 731 (9th Cir. 1999)).
[^65]: Id. at 38 (citing Assad; Flaherty; KalshiEX LLC v. Schuler, No. 26-3196, 2026 WL 1295806, at *3 (6th Cir. Apr. 24, 2026) (per curiam); KalshiEX LLC v. Martin, 793 F. Supp. 3d 667, 678 (D. Md. 2025); and KalshiEX LLC v. Williams, No. 25-cv-08846, 2026 WL 2017466, at *6-9 (S.D.N.Y. July 13, 2026)); see also id. at 18 (describing the Schuler panel as finding the exclusive-jurisdiction question "largely in equipoise (if not favoring Ohio)").
[^66]: Id. at 18.
[^67]: 25 U.S.C. § 2710(d)(7)(A)(ii) (2018) (conferring jurisdiction over "any cause of action initiated by a State or Indian tribe to enjoin a class III gaming activity located on Indian lands"); Blue Lake, slip op. at 26 (noting that Congress "limited who may 'initiate' an action (tribes and states)").
[^68]: Blue Lake, slip op. at 5-7 (listing the Attorneys General of Massachusetts, California, twenty-five other states, and the District of Columbia as amici curiae).
[^69]: Press Release, Office of the Mass. Att'y Gen., AG Campbell Secures Court Order That Will Block Kalshi from Offering Unlawful Sports Wagers in Massachusetts (Jan. 20, 2026), https://www.mass.gov/news/ag-campbell-secures-court-order-that-will-block-kalshi-from-offering-unlawful-sports-wagers-in-massachusetts (announcing a preliminary injunction and the denial of Kalshi's motion to dismiss in an action filed in September 2025). Kalshi has appealed.
[^70]: Connecticut Sues Kalshi Over Unlicensed Sports Betting, WFSB (Aug. 27, 2026), https://www.wfsb.com/2026/08/27/connecticut-sues-kalshi-over-unlicensed-sports-betting/ (reporting the Attorney General's suit seeking an injunction against unlicensed sports wagers).
[^71]: Press Release, Cal. Dep't of Justice, Attorney General Bonta Joins Bipartisan Coalition Defending State Gambling Laws Against Kalshi (June 12, 2026), https://oag.ca.gov/news/press-releases/attorney-general-bonta-joins-bipartisan-coalition-defending-state-gambling-laws (announcing an amicus brief in the Sixth Circuit in support of Ohio).
[^72]: 7 U.S.C. § 16(e)(2) (2018) (excepting "antifraud provisions of general applicability" from the clause's preemptive reach); see supra note 42.
[^73]: Cal. Bus. & Prof. Code § 17204 (West 2025) (authorizing actions by the Attorney General, district attorneys, county counsel, and specified city attorneys, and requiring private plaintiffs to show lost money or property); id. § 17206(a) (providing civil penalties of up to $2,500 for each violation in actions by public prosecutors).
[^74]: New Jersey Asks Supreme Court to Settle Kalshi Sports-Contracts Fight, Prediction News (Sept. 2, 2026), https://predictionnews.com/story/new-jersey-asks-supreme-court-to-take-up-kalshi-sports-contracts-fight (reporting the petition); compare Flaherty, slip op. at 8, 10 (concluding that Kalshi's sports-related event contracts are swaps and that the CEA preempts New Jersey's gambling laws as applied to them), with Assad, slip op. at 41 (concluding that the contracts are likely not swaps and affirming the dissolution of Kalshi's injunction against Nevada). Judge Roth dissented in Flaherty, reasoning that "if it looks like gambling, talks like gambling, and calls itself gambling, it's gambling," and that "agency inaction alone cannot preempt state law." Flaherty, slip op. at 7, 19 (Roth, J., dissenting).
[^75]: Prediction Markets; Public Interest Determinations, 91 Fed. Reg. 35806 (proposed June 12, 2026) (to be codified at 17 C.F.R. pt. 40) (proposing factors for contract-by-contract public interest determinations and a definition of "gaming").
[^76]: See Assad, slip op. at 15-16 (distinguishing whether an event occurs from which outcome it produces).
[^77]: Flaherty, slip op. at 8 (Roth, J., dissenting) (arguing that the court "must 'start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act'"); see Blue Lake, slip op. at 36 (observing that Congress "spoke clearly" to preempt state regulation of swaps on a DCM but "did not say clearly that the CEA displaces other federal statutes").