State courts have struck another blow against online prediction market Kalshi, which has sought to remain outside of gaming law, claiming it's a trading — not gambling — platform.

On Wednesday, a US District judge granted a preliminary injunction to California tribes, prohibiting Kalshi from offering sports contracts (AKA trades or "swaps") on tribal land . The ruling was handed down to the Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, which jointly sued Kalshi for allegedly violating the Indian Gaming Regulatory Act.

In that case, a panel of judges ruled that Kalshi's sports prediction trading constituted Class III gaming, which covers sports betting and parimutuel (pool) wagering.…