The Ninth Circuit Court of Appeals has delivered two contrasting rulings in recent days, with one supporting a Native American tribe’s environmental case and the other backing states’ regulatory authority over gambling. In the Kalshi case, the court’s decision undermines a previous injunction blocking Arizona from prosecuting the prediction market firm for violating state gambling laws, according to the Arizona Mirror.

Federal Judge’s Injunction Under Fire

A federal judge in Arizona had previously issued an injunction preventing the state from pursuing legal action against Kalshi, a company offering prediction markets, for allegedly violating Arizona’s gambling laws. The court’s latest ruling in a similar case involving Nevada could now revive Arizona’s prosecution of the firm; the decision clarifies that gambling on sporting events does not fall under the protections of the federal Commodity Exchange Act, according to the Arizona Mirror.

Legal Rationale and Implications

Earlier this year, Judge Michael Liburdi ruled in favor of Kalshi, interpreting the Commodity Exchange Act broadly to include sporting events as eligible for prediction markets. This interpretation limited states’ ability to regulate such activities, as it placed oversight under the federal Commodity Futures Trading Commission. However, the Ninth Circuit’s recent decision refutes this interpretation, stating that sports events do not qualify as “swaps,” and therefore fall outside the scope of federal protection. The ruling could prompt a reevaluation of the injunction issued in Arizona, allowing the state to proceed with its legal action against Kalshi.

Environmental Victory for the Yurok Tribe

On a different front, the Ninth Circuit delivered a significant environmental decision in favor of the Yurok Tribe and fishing advocates; the court affirmed a lower court’s ruling that the U.S. Bureau of Reclamation must comply with the Endangered Species Act when operating the Klamath Irrigation Project, according to the Courthouse News. In a 2-1 decision, the appeals panel held that the Bureau’s operation of the Klamath Project is subject to the requirements of the ESA, particularly Section 7, which mandates that federal agencies ensure their actions do not jeopardize endangered species or their habitats.

U.S. Circuit Judge Ronald Gould, writing for the majority, emphasized that the court’s previous rulings have recognized the Klamath Project as central to the enforcement of the Endangered Species Act. The dissenting opinion, however, questioned the applicability of the ESA in this context, but the majority rejected this argument, affirming the necessity of federal compliance with the law in this case.