Despite admitting that the prediction market “may have found a way around prohibitions on interstate gambling,” a federal judge dismissed an injunction to three California tribes, allowing Kalshi to continue providing its contracts in Indian Country.
Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians requested an injunction on Monday, but Judge Jacqueline Scott Corley of the U.S. District Court for the Northern District of California denied their request. The injunction would have forced Kalshi to cease offering contracts for sporting events on their properties.
Despite seeming sympathetic to the tribes’ moral arguments during a hearing in October and in her judgment rejecting the injunction, Judge Corley did this.
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She said, “The Court does not take lightly Plaintiffs’ concerns about the effects Kalshi’s activities might have on tribal sovereignty and the Tribes’ finances.” In fact, Kalshi may have circumvented interstate gambling bans that were established with the Tribes’ best interests in mind by self-certifying the validity of its event contracts in a way that shields its operations from court examination.
“However, Plaintiffs have not fulfilled their burden of demonstrating a likelihood of success based on the record currently before the Court and in light of the Commodity Exchange Act’s self-certification process.”
The judge dismisses the arguments made by both tribes.
The tribes had requested the injunction on two grounds: first, that Kalshi’s contracts for sporting events were illegal under the Indian Gaming Regulatory Act (IGRA); second, that Kalshi had engaged in deceptive marketing through false advertising, which violated the Lanham Act.
In addressing the Lanham Act issue first, the judge noted that judges in two other district courts for Nevada and New Jersey had reached the same decision, and Kalshi seemed to have a sincere belief that its products were lawful. A judge in Maryland didn’t agree.
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