Gaming attorney Daniel Wallach is urging California tribes to recruit city and county attorneys into their fight against Kalshi, arguing that tribal litigation alone won’t force the prediction-market operator out of the state. The push follows a Ninth Circuit ruling this month that found Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians likely to succeed in showing Kalshi’s sports-event contracts violate the Indian Gaming Regulatory Act and the tribes’ own gaming regulations, entitling them to a preliminary injunction.
Kalshi has since filed for an en banc rehearing of that decision, according to CDC Gaming.
A Local Enforcement Workaround
Wallach’s proposed route runs through California’s Unfair Competition Law, which bars unlawful, unfair, or fraudulent business practices. Under that statute, city and county attorneys in municipalities with at least 750,000 residents – a threshold that covers Los Angeles, San Francisco, and San Diego – can bring enforcement actions on behalf of the people of California, a city, or a county.
Wallach pointed to the Los Angeles city attorney’s lawsuit against Stake.us, which alleges the platform is unlicensed and operating in violation of state law, as a template tribes could push local prosecutors to replicate against Kalshi. He noted that tribal and IGRA-based actions, by contrast, can only produce injunctive relief – not damages, restitution, or disgorgement – which is why he sees city and county enforcement as a faster, more forceful lever.
How the Case Got Here
The Ninth Circuit’s ruling in favor of Blue Lake Rancheria and Chicken Ranch Rancheria came shortly after a separate Ninth Circuit decision backing the Nevada Gaming Control Board, which had banned Kalshi and other prediction-market platforms from offering similar sports-event contracts in that state. Wallach said Kalshi has now lost before six judges across these proceedings, and suggested the company’s en banc request is less about reversing that record than about discouraging Western states – California chief among them – from pursuing civil or criminal enforcement while the ruling remains unsettled. That dynamic is consistent with the broader appellate pressure Kalshi has faced, detailed in ReadWrite’s earlier coverage of the tribal-lands ruling and in reporting on tribal coalitions coordinating appellate litigation elsewhere.
Why California Is the Holdout
Nevada, Washington, Maryland, and Massachusetts have already taken aggressive enforcement action against prediction markets, per Wallach, but California has not followed. He drew a parallel to California Attorney General Rob Bonta’s July 2024 opinion declaring daily fantasy sports contests illegal sports betting under state law – an opinion Wallach said changed little because Bonta never followed it with direct enforcement. He said he doesn’t expect Bonta to move against Kalshi, Robinhood, or Crypto.com any time soon, citing the outside law firm involved in Bonta’s recent Paramount-Warner Bros. merger settlement as a factor shaping his prediction. Broader tribal frustration with that regulatory gap has surfaced elsewhere too, including in tribal leaders’ warnings to Congress about prediction markets.
What Happens Next
Wallach doesn’t expect the Ninth Circuit decision to immediately force Kalshi or its peers off California platforms, comparing its practical effect to the largely unenforced 2024 DFS opinion. Absent city or county intervention, he said tribes may be waiting more than a year for the U.S. Supreme Court to weigh in – and by then, he suggested, the companies involved may have already retreated from contested markets on their own. Kalshi’s en banc petition remains pending.
Further legal analysis of the underlying opinion is available via National Law Review’s breakdown of the Ninth Circuit’s reasoning and a separate summary from Mahrouyan Law.
The post Wallach Urges California Prosecutors to Take On Kalshi appeared first on ReadWrite.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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