Sovereignty, Swaps and Secretarial Procedures: What the Tunica-Biloxi Deal With Kalshi Actually Is

The first tribally owned prediction-market venture arrived 48 hours after a federal appeals court held Kalshi’s sports contracts are Class III gaming. Both things are true, and the reason they can be true at once is structural.

On 18 September 2026, the Tunica-Biloxi Tribe of Louisiana announced SaltTrade Derivatives, a tribally owned prediction-market application built on KalshiEX LLC’s exchange infrastructure. Two days earlier, on 16 September, the United States Court of Appeals for the Ninth Circuit had held that Kalshi’s sports event contracts are Class III gaming under the Indian Gaming Regulatory Act when purchased by a user standing on Indian lands.

The California Nations Indian Gaming Association called the timing “profoundly disappointing.” The Indian Gaming Association asked the Commodity Futures Trading Commission to withdraw a staff letter issued the day between those two events. Tunica-Biloxi Chairman Marshall Pierite published an essay titled “Sovereignty Includes the Power to Build What Comes Next.”

I have spent more than three decades in this industry, a good deal of it working with tribal nations, and I have rarely seen a week in which so many people were talking past each other with such conviction. This piece sets out what was actually signed, what legal ground it stands on, where that ground is solid and where it is not, and what each party is arguing, with the documents cited throughout. Readers can draw their own conclusions. They should at least draw them from the sources.

Disclosure: SCCG Management advises client-partners across the gaming industry, including tribal nations. SCCG does not represent Tunica-Biloxi, Kalshi, or SaltTrade Derivatives in connection with this venture, and has no financial interest in its outcome.

I. What was announced

Tunica-Biloxi is based in Marksville, in Avoyelles Parish, central Louisiana. It operates Paragon Casino Resort, which opened in June 1994 as Louisiana’s first land-based casino, and which is the largest employer in the parish. The property carries roughly 500 rooms, a gaming floor and a sportsbook.

SaltTrade Derivatives is described by the tribe as the first tribal nation prediction-market app. The division of labour, as reported, is straightforward: Kalshi supplies the exchange — liquidity, matching, clearing, custody, surveillance — and SaltTrade operates the application, owning the brand, the marketing and the customer relationship. Pierite described the commercial rationale:

“We are partnering with Kalshi to power our prediction markets software application because it will allow us to plug directly into Kalshi’s existing exchange, and from day one its traders draw on the same global liquidity pool as every other Kalshi participant nationwide.”

Kalshi chief executive Tarek Mansour said:

“The debate can no longer be reduced to prediction markets on one side and tribes on the other. What’s clear is that regulated national infrastructure and tribal entrepreneurship can develop together — and one does not have to lose for the other to win.”

II. What the structure actually is

This is where the explaining needs to start.

In a venture of this shape, the tribal entity is not the exchange. KalshiEX LLC is the designated contract market — the CFTC-regulated venue where contracts trade. The tribal entity operates a front end. Customer funds do not sit with it; under the model the CFTC has been describing, they sit with the exchange’s clearing organisation or with a futures commission merchant that is a member of it.

That distinction is not cosmetic. It determines which federal registrations apply, who is liable for what, and — as we will see — whether a tribe must surrender something in order to participate.

The CFTC has a name for this category of participant. On 17 September 2026, its Market Participants Division issued Staff Letter 26-25, addressing what it calls “Passive Software Providers”: firms that distribute front-end software letting users “submit orders for Commission-regulated derivative products directly to Registrants, including event contracts.” Such a provider may take a revenue share and charge transaction fees. What it may not do is decisive:

“At no point would the PSP hold, control, or take into custody User assets, generate express ‘buy’ or ‘sell’ signals, or exercise discretion with respect to the routing or execution of User orders.”

One caution, and I want to be exact about it. Letter 26-25 is the framework that fits a “powered by Kalshi” tribal application. Whether SaltTrade relies on it is not something I can confirm from any public document. No filing under the letter is public — by design, as explained below. Readers should treat the fit as descriptive of the category, not as an established fact about this venture.

III. The legal basis, and what it does not cover

Three things about Letter 26-25 are widely misunderstood, and all three matter.

It was not written for gaming, or for tribes. The letter descends from Staff Letter 26-09, issued in March 2026 to Phantom Technologies, Inc., a developer of self-custodial crypto wallet software. Because a no-action letter binds only its beneficiary, other similarly situated firms asked for the same treatment, and MPD generalised it. The word “Kalshi” does not appear in Letter 26-25. Neither does “tribe,” “sports,” or “gaming.” Anyone describing it as the CFTC clearing the way for tribal prediction markets is reading an intention into a document that does not contain one.

It grants relief from registration, and nothing else. The Division will not recommend enforcement for failure to register as an introducing broker or associated person. It does not address whether the underlying contract is lawful. It says nothing about IGRA, Class III gaming, or tribal-state compacts. It is also explicitly not binding on the Commission itself — only on the Division that issued it — and it evaporates if the facts change or when the Commission issues a rule.

And then there is footnote 22. Attached to the condition requiring a provider to consent to CFTC enforcement jurisdiction:

“Some PSPs may be affiliated with a state or tribal government and as such potentially protected by sovereign immunity. Thus, a PSP shall include a waiver of sovereign immunity, limited or otherwise, if necessary to make enforceable the PSP’s consent to the Commission’s jurisdiction…”

That is worth reading closely. The Division had tribal governments in view when it drafted this. And the price of admission for a tribal entity is a waiver — limited, but a waiver — of the sovereign immunity that is the foundation of everything else a tribe does.

This creates a tension that belongs in the record rather than in an argument. A venture presented as an exercise of sovereignty may require, as a condition of the federal relief that makes it practical, that a measure of that sovereignty be contracted away. A supporter would answer that choosing to accept a limited waiver is itself an act of self-government, and that tribes waive immunity in commercial agreements routinely. A critic would answer that the federal government should not be setting that price at all. Whether Tunica-Biloxi has executed any waiver is not public. But anyone assessing this deal, in either direction, should know the question exists.

IV. The Ninth Circuit ruling, and why it does not control Louisiana

Blue Lake Rancheria; Chicken Ranch Rancheria of Me-Wuk Indians v. Kalshi, Inc.; KalshiEX, LLC; Robinhood Markets, Inc.; Robinhood Derivatives, LLC, No. 25-7504, was filed on 16 September 2026, opinion by Judge McKeown, joined by Chief Judge Murguia and Judge Paez.

Note first what the case is. Two California tribes sued Kalshi. This is not a decision about tribal participation in prediction markets; it is a decision obtained by tribes against an operator they say is gaming on their land without authorisation.

The holding is functional, and the court was blunt about it:

“The analysis 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.”

“Kalshi may reshuffle the cards, but it cannot change the hand: Its sports event contracts are class III gaming.”

On location — the argument that a New York exchange cannot be gaming on a reservation:

“Kalshi may be headquartered in New York, and its back-end infrastructure may sit off Indian lands, but a Kalshi consumer can still enter an event contract on Indian lands if she purchases one while on a reservation.”

The court also addressed the preemption argument that has carried Kalshi elsewhere, and held that even if the contracts were swaps, the result would be the same. The Commodity Exchange Act’s express preemption clause reaches “any State or local law.” It does not, the panel said, displace another federal statute:

“The two statutes simply address two different questions. The CEA gives the Commission ‘exclusive’ jurisdiction over covered derivatives trading on designated contract markets. IGRA governs class III gaming activity located on Indian lands.”

Kalshi’s own case, in its own terms

The piece would be incomplete without the argument Kalshi is actually making, which is not that gambling law should be ignored but that Congress already decided who regulates these instruments.

Kalshi’s position is that its sports event contracts are swaps traded on a federally designated contract market, that the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over them, and that the CFTC has repeatedly certified such contracts for listing without objection. The Third Circuit accepted exactly that reasoning in Flaherty, affirming an injunction in Kalshi’s favour against New Jersey: the contracts “are swaps traded on a CFTC-licensed DCM, so the CFTC has exclusive jurisdiction.”

Kalshi also won a point in Blue Lake that is easy to miss. The tribes’ Lanham Act claim over its advertising — “Sports Betting [Is] Legal in all 50 States on Kalshi” — was dismissed, and the Ninth Circuit affirmed that dismissal, on the ground that “[t]he legality of Kalshi’s products remains unsettled.” A court telling you your legal position is arguable is not nothing.

On 9 September Kalshi petitioned for rehearing en banc in the Ninth Circuit’s Assad case, arguing the panel’s reasoning was internally inconsistent — holding these contracts lack economic consequence while conceding the CFTC has authority over them.

Now a point largely absent from the coverage. Louisiana is in the Fifth Circuit. Blue Lake is Ninth Circuit authority. It does not bind a Louisiana venture. It is persuasive, it is published, and it will be cited everywhere — but it is not binding precedent in the Fifth Circuit, and no court there has ruled on the question. Non-binding is not the same as permitted: IGRA applies nationwide, a Fifth Circuit court could reach the identical result, and the NIGC could act regardless of circuit. That bears on the venture’s legal exposure. It does not answer CNIGA’s objection, which is to the timing and the signal rather than to any claim that Tunica-Biloxi is bound by the Ninth Circuit.

One further wrinkle worth stating plainly, because it complicates the geography argument rather than supporting it. Louisiana’s own Attorney General, Liz Murrill, joined the multistate amicus brief filed in support of the tribes in Blue Lake, alongside Massachusetts, California and 25 other states and the District of Columbia. The venture’s home state has already told a federal appeals court which side of this argument it is on. That does not make the venture unlawful in Louisiana, and no Louisiana enforcement action has been announced. It does mean the Fifth Circuit’s silence should not be read as Louisiana’s assent.

Two further qualifications, in fairness to both sides. The decision is a preliminary-injunction ruling — the standard is likelihood of success, not final judgment, and the case was remanded. And the panel itself flagged the novelty of what it was not deciding:

“Notably, none of these cases involves event contracts on tribal lands.”

A tribe operating on its own land, under its own gaming ordinance, is in a different posture from Kalshi in Blue Lake, where the defect was that the gaming was not tribally authorised at all. Whether that difference is dispositive has not been decided by any court.

V. The circuit split

The panel catalogued the disagreement among the circuits:

Third Circuit, KalshiEX, LLC v. Flaherty, 172 F.4th 220 (2026) — the CEA preempts state gaming regulation because Kalshi’s event contracts are swaps.
Ninth Circuit, KalshiEX, LLC v. Assad, 2026 WL 2543846 (28 August 2026) — those contracts “are likely not swaps under the CEA.” This is a separate case from Blue Lake, decided three weeks earlier, brought by Kalshi against Nevada’s regulators. The two are easy to conflate and should not be: Assad is the swaps ruling that creates the circuit split; Blue Lake is the IGRA ruling that matters for tribal land.
Sixth Circuit, KalshiEX LLC v. Schuler (April 2026) — the jurisdictional question is “largely in equipoise (if not favoring Ohio).”

Two federal appellate courts have reached opposite conclusions on whether these instruments are swaps. Kevin Washburn, the former Assistant Secretary for Indian Affairs, has said: “It certainly will go to the Supreme Court because there will be circuit splits.”

That process has started. New Jersey petitioned for certiorari on 2 September 2026, seeking review of the Third Circuit’s decision; Attorney General Jennifer Davenport framed the question as whether Congress “federalized the multi-billion-dollar sports gaming industry at the expense of every state’s sports gambling law.” Kalshi took a different route on 9 September, seeking rehearing en banc in the Ninth Circuit rather than going straight up; Robinhood is reported to have filed its own certiorari petition the same day. No docket number for either petition is yet public, and both Ninth Circuit matters remain interlocutory — which is itself a reason the Court may wait.

Until that is resolved, the legality of this product depends substantially on which map you are standing on. That is an uncomfortable thing to say about a nationally distributed financial application, and it is nonetheless the state of the law.

VI. The case Tunica-Biloxi is making

Pierite’s argument is not primarily legal. It is economic, and it is about who in Indian Country can afford which principles.

“We expect some tribes, particularly those with established, high-revenue gaming operations, will say the Tribe is ‘selling out’ Tribal gaming or that this is bad for Indian Country. But that reaction often comes from a position of strength that not every tribe shares.”

“For tribes without the same access to lucrative gaming markets or major metropolitan populations, prediction markets represent a new and meaningful source of revenue.”

Pierite’s summary formulation:

“Economic sovereignty does not require economic uniformity.”

That premise is testable against the federal regulator’s own figures. The National Indian Gaming Commission’s FY2025 report states:

“Approximately 9% of gaming operations reported more than $250 million of GGR in FY 2025 and their aggregate revenues made up more than half (56%) of the total GGR. In comparison, just over 54% of Tribal gaming facilities reported less than $25 million in GGR, and this group represents about 5% of the total GGR share. The percentages of operations that make-up the respective ranges have been relatively consistent over the past years.”

Nine per cent of operations take 56% of the money. Fifty-four per cent split five per cent. And the regulator says that split is structural, not a bad year. NIGC counts 545 audited gaming operations run by roughly 246 tribes. The number of federally recognised tribes that operate no gaming at all is not published in that report and is not asserted here.

Pierite also argues prediction markets have not cannibalised tribal gaming: FY2025 gross gaming revenue hit a record $46.2 billion, which is exactly right — NIGC reports $46,162,783,570, up 5.3% on FY2024’s 4.6% growth. One caveat in fairness to his critics: his claim that growth “accelerated in most NIGC regions” is not verifiable from published data. Seven of eight regions increased; whether they accelerated would require per-region FY2024 growth rates NIGC does not publish.

VII. The case against

The opposition’s core argument is jurisdictional, though it also disputes the economics.

CNIGA Chairman James Siva, on the Ninth Circuit ruling:

“Sports wagers do not become financial instruments simply because a company calls them ‘event contracts.'”

“Federal commodities law does not erase IGRA or create a backdoor for unauthorized sports gambling on tribal lands.”

On the Tunica-Biloxi announcement, CNIGA said, in a statement reported by Tribal Business News, that the tribe had chosen “to stand with Kalshi and help legitimize the same business model that other tribal nations and states across America are fighting to stop,” adding: “And a business deal does not change the law.”

Indian Gaming Association Chairman David Z. Bean — and note the IGA is the organisation formerly called NIGA, not to be confused with the NIGC, the federal regulator — put it this way:

“Congress did not create IGRA only to have its protections disappear when gambling moves onto a phone.”

“We cannot allow a new name or a different technology platform to become a pathway around tribal sovereignty, IGRA, tribal-state compacts, and established gaming laws.”

On Letter 26-25, in a statement titled “The CFTC’s Transparent Attempt to Divide Indian Country”:

“There is nothing in this CFTC Staff Letter that would benefit tribal economies, it would only benefit crypto wallets, Kalshi and other Prediction Market companies’ bottom lines.”

NCAI President Mark Macarro has argued that a roundtable does not satisfy the federal consultation requirement: “What Tribal Nations require — and what federal law mandates — is government-to-government consultation.”

And the most substantive rebuttal to Pierite’s revenue argument comes from Kevin Washburn:

“What I’m worried about with this data is that it might disguise the impact a little bit.”

“I think there’s an existential threat that’s even greater than whatever the incremental impact on revenues is.”

Washburn’s objection is different in kind from the others. It is not that prediction markets are taking money today. It is that exclusive tribal jurisdiction over gaming on Indian lands — the thing IGRA exists to protect — erodes the moment the activity is redefined as something else. Washburn’s point from the New Mexico litigation is the vivid one: users were accessing prediction markets on phones inside tribal casinos. On that account the concern is territorial before it is commercial.

VIII. The question nobody is asking: which rulebook protects the customer

There is a gap in this debate that neither side has made much of, and it matters more than the sovereignty argument to the person actually placing the trade.

A compacted Class III operation carries a defined set of consumer obligations: responsible-gaming programmes, self-exclusion, age verification, advertising limits and anti-money-laundering duties, enforced by a tribal gaming commission and, ultimately, the NIGC. A CFTC-regulated derivatives participant carries a different set, built for traders rather than for players — and a “Passive Software Provider” under Letter 26-25 expressly may not “hold, control, or take into custody User assets” at all.

Those are not better and worse regimes. They are regimes designed for different risks. Which one governs a person opening a tribally branded app to buy a contract on a football game is a live question, and one that will be answered in practice long before it is answered in court. Neither the tribal organisations nor the CFTC has addressed it directly in the material reviewed here.

VIII. What is genuinely unresolved

An honest reference piece should be as clear about the gaps as the findings.

Whether SaltTrade relies on Letter 26-25, and whether any sovereign immunity waiver has been executed. Filings under the letter are made privately to the Division. Nothing is public.
Whether a tribe operating on its own land under its own ordinance falls outside Blue Lake‘s reasoning. No court has decided it.
What happens off Indian lands. IGRA confers no authority there, and that is precisely the territory where the circuits are split.
Whether other tribes follow. Tunica-Biloxi describes SaltTrade as the first of its kind; no other tribal prediction-market venture has been publicly announced. That is an absence of announcements, not proof of an absence of interest.
What Louisiana thinks. The nearer constraint on this venture is not the Fifth Circuit but Tunica-Biloxi’s own compact. Neither the Louisiana Gaming Control Board nor the state Attorney General has stated a public position on whether SaltTrade falls inside it. Louisiana’s Attorney General did, however, join the multistate amicus supporting the tribes in Blue Lake.
What the NIGC thinks. The federal regulator is cited throughout this piece for its revenue data. It has not said publicly whether it regards SaltTrade as Class III gaming requiring an approved ordinance, and that silence should be read as silence rather than as either approval or objection.
Whether the tribes Pierite speaks for agree. His argument rests on the position of tribes without access to lucrative gaming markets. No such tribe has publicly endorsed or opposed the venture. The statistical premise is documented; the claim to represent that constituency is not tested.

IX. The overarching read

Three things are true at once, and holding all three is the only honest position available.

Pierite’s economic premise is supported by the regulator’s own data. The NIGC’s figures show a structural, persistent disparity in Indian Country. Whether that disparity justifies this particular venture is a separate question, and one his critics answer differently: Washburn’s argument is that aggregate revenue figures may “disguise the impact,” and that the jurisdictional loss matters more than the revenue either way.

The opposition’s legal premise is also correct. A federal appeals court has now held that these contracts are Class III gaming under IGRA, functionally assessed, and that the CEA does not displace IGRA. That is a serious holding by a unanimous panel, and CNIGA’s “a business deal does not change the law” states the point directly.

And the two do not actually contradict each other, which is why this is a genuine dispute rather than a misunderstanding. The tribes suing Kalshi are objecting to an operator offering unauthorised gaming on their land. Tunica-Biloxi is proposing to offer a product it has authorised on its own. Those are different legal questions wearing the same clothes. The reason everyone is shouting is that the answer to the second has not been written yet, by anyone, anywhere.

What the industry should take from this week is narrower than the headlines suggest. There are two readings of the divide itself. The IGA’s, in its own headline, is that the CFTC is attempting “to divide Indian Country” — that a federal agency has engineered a split by offering one tribe a door. Pierite’s is that the division is pre-existing and economic, and that the disparity in the regulator’s tables long predates prediction markets. Both readings are available on the evidence, and which one a reader finds persuasive will depend largely on where they sit. The legal position, meanwhile, is genuinely unsettled, with two circuits in direct conflict and certiorari sought. Two questions remain open, and they are different. The first is whether a tribe offering these contracts on its own land under its own ordinance falls outside Blue Lake‘s reasoning; no court has decided it. The second is whether IGRA’s exclusivity is diminished when the same activity is relocated into an instrument the CEA governs — which is the objection CNIGA, IGA and NCAI are actually making, and which the Ninth Circuit’s territorial holding does not reach.

Nobody knows the answer to either.

By Stephen A. Crystal, Founder & CEO, SCCG Management. The Gambling Industry’s Global Connector.

Sources: Tunica-Biloxi Tribe of Louisiana, “Sovereignty Includes the Power to Build What Comes Next” and launch release, 18 September 2026; Tribal Business News, Chez Oxendine, 19 September 2026; CFTC Staff Letter 26-25, 17 September 2026; Blue Lake Rancheria v. Kalshi, Inc., No. 25-7504 (9th Cir., 16 September 2026); National Indian Gaming Commission FY2025 Gross Gaming Revenue Report; Indian Gaming Association and California Nations Indian Gaming Association statements, September 2026; Tribal Business News interview with Kevin Washburn, 4 August 2026.