Thee Ninth Circuit ruled Wednesday that prediction markets such as Kalshi are likely violating California law by allowing users to wager on sporting events on tribal land.

Though sports betting is legal in 38 states, it remains illegal in California although such bets can be placed at Native American casinos. Prediction market apps like Kalshi let people bet on anything from the winner of a Grammy award to what President Donald Trump will say in a speech. They also allow people to bet on sporting events though it calls these bets “event contracts,” arguing this loophole makes them legal. But the Ninth Circuit disagrees.

“Imagine a user standing on the floor of the Blue Lake Casino Hotel who downloads Kalshi and DraftKings, a classic online sports betting app,” wrote U.S. Circuit Judge M. Margaret McKeown in Wednesday’s unanimous opinion. “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. Kalshi may reshuffle the cards, but it cannot change the hand: Its sports event contracts are class III gaming.”

Les Marsten, an attorney representing the two tribes suing Kalshi and Robinhood, called the ruling “a great victory for the tribes,” one that “upheld the tribes’ ability to govern themselves.”

“What Kalshi and Robinhood have been doing is immoral,” Marsten said in a phone interview. “It’s wrong. Kalshi is a $44 billion company. For a couple of million, they could have geofenced around the tribes’ reservations. But they refused to do that, because they’re greedy corporations that are only interested in the almighty dollar.” He added the betting apps are draining money from the tribes, which they need to “fund essential government services.”