Three New Mexico pueblos and the Mescalero Apache Tribe wrapped up closing arguments Friday asking a federal judge to block Kalshi's sports-betting app on tribal lands. The tribal nations argue the CFTC-regulated prediction market's sports event contracts infringe on their gaming sovereignty and violate state and tribal gaming law. They are seeking an immediate injunction to halt Kalshi's operations in those areas. The case follows a new appeals court ruling that restores state regulators' oversight of the prediction market.

A federal injunction would force Kalshi to geofence tribal lands inside New Mexico. That adds a geographic carve-out to the state-level bans already stacking up after Nevada, Connecticut, and Baltimore. Each new front compounds Kalshi's legal spend and splinters its national sports market. The tribal sovereignty angle is novel: a win here gives other tribal nations a template to challenge event contracts on reservation land nationwide. Polymarket and other CFTC-registered platforms face identical exposure because the same preemption logic underpins their sports offerings. Traders hold positions whose legality now shifts with state borders, tribal boundaries, and federal circuits. The first permanent tribal injunction would turn a scattered legal headache into a structural market problem.