[00:00:00] Speaker 01: May it please the court. [00:00:02] Speaker 01: My name is Lester Marston. I'm here on behalf of the Blue Lake Rancheria, the Chicken Ranch Rancheria, and the Picayune Rancheria. [00:00:11] Speaker 01: I would like to reserve five minutes of my time for rebuttal. [00:00:16] Speaker 01: May it please the court. [00:00:18] Speaker 01: I'd like to start off by answering the question that you asked in your order, and that is, What impact will the tribe's gaming ordinances have on your interpretation of 2710D7A2, the section of the IGRA that grants the district court jurisdiction over any cause of action brought by an Indian tribe to enjoin a Class III gaming activity that's conducted in violation of a tribal state compact? The short answer to that question is this. [00:00:49] Speaker 01: that you have to take a look at the compact provisions and the ordinances that are at play in this case. And if you do that, what you'll see is that they are really integrated. They are intertwined so that a violation of the gaming ordinance is, in fact, a violation of the compact. [00:01:12] Speaker 01: Why is that the case? Because if you examine the provisions of the compact and the provisions of the ordinance, The first thing that you'll see is that the compact contains a provision that incorporates all of the provisions of the ordinance into the compact. If you go to the gaming ordinances, you'll see there are provisions in the gaming ordinance that incorporate all of the provisions of the compact. [00:01:36] Speaker 05: Is the tribe required to adopt the ordinances after the compact has been negotiated? Is the tribe required to adopt the ordinances? Oh, absolutely, Your Honor. [00:01:49] Speaker 01: So like you were just saying, they work in sync. I want to answer your question this way. You can't just look at the compact and the ordinances because they're not the sole body of law that's in play. You also have to look at the applicable provisions of the Indian Gaming Regulatory Act because those three documents create one comprehensive regulatory screen. scheme, one body of the law that determined whether or not the district court has jurisdiction in the case. [00:02:25] Speaker 01: So to answer your question, the IGRA specifically requires the tribes to adopt an ordinance. And more than that, the IGRA says that if the tribes don't adopt the ordinance, the provisions of the compact, the terms and conditions of the compact don't become effective. So the compact is the effectiveness of the compact is actually determined by the enactment of the ordinance and the authorization of the enactment of the ordinance actually authorizes the termination. [00:03:01] Speaker 05: So how does the do the ordinances here that are in play here? Do they prohibit the activity that that culture engages in a game at gaming, gambling level three or whatever it is? [00:03:15] Speaker 01: You obviously read the ordinances, Your Honor, because each of the ordinances contain a provision that specifically prohibits the conduct, prohibits any person other than the tribe from playing the games, and prohibits all games other than the games that are specifically authorized in the compact. [00:03:39] Speaker 03: Essentially, they say that they prohibit illegal gaming on their land, correct? [00:03:43] Speaker 01: Yes. [00:03:44] Speaker 03: And so my follow-up question then, because one of the crux of the argument from Kalshi is that, well, we are not party to the compact, and therefore you can't really have a claim against us because we didn't sign up for this. And then you say, well, look at the ordinance, right? [00:04:06] Speaker 01: Well, I say more than that. It's not just the ordinances that contain provisions that prohibit the conduct. The IGRA prohibits the conduct. 2710 D1 specifically states that no Class 3 gaming, no Class 3 gaming by anyone, not even the tribes, can be conducted on the tribe's Indian lands unless it is what? Authorized by the ordinance. Two, the state has to permit any person, organization, or entity to play the game. And number three, that conduct has to be conducted in conformance with the provisions of the Tribal State Gaming Compact. [00:04:42] Speaker 01: So the IGRA itself, And let's not forget 18 U.S.C. Section 1166A, because the IGRA is not just a civil statute. It's a criminal statute. It says that if Kalshi comes onto our Indian lands and engages in any conduct that's a violation of state law, and let's not forget the California Enacted Penal Code Section 337A made it a crime to engage in sportsbook gambling. [00:05:10] Speaker 05: Well, go ahead. [00:05:11] Speaker 01: I was just going to wrap up by saying, So if Kalshi is violating the state's law, then that's a violation of federal law. [00:05:22] Speaker 01: 1166 prohibits the conduct and makes it a crime. 2710 D1 prohibits the contract and affords the tribe civil remedies. Kalshi, you're right. There's nothing in 2710 D7A2 that mentions third parties, but there's also no limiting language in the section. It says any cause of action brought by the Indian tribes. It doesn't say any cause of action brought by the Indian tribes solely against the state. It says any cause of action brought by the Indian tribes. [00:05:55] Speaker 03: So on that jurisdiction question, or we use the word jurisdiction kind of loosely, as you know, Springport has cautioned that use of that does not really mean jurisdiction. But in your view, what's the relationship – between the CFTC's, quote, exclusive jurisdiction language and jurisdiction under 1331, which would be basically a federal statute, and IGRA. [00:06:26] Speaker 03: What is the interrelationship among those three statutes? [00:06:30] Speaker 01: 7 U.S.C. Section 2A1A allegedly grants the CFTC so-called Exclusive jurisdiction. But what Congress giveth, Congress taketh away. There's two savings clauses in the statute, as I'm sure the court well knows. Those savings clauses do two things. Number one, they expressly exempt other authorities' rights under rights and responsibilities is the term I think they use, under any other federal law. [00:07:05] Speaker 01: So There's a savings clause specifically that exempts from the CFTC's exclusive jurisdiction the right of the tribes, because they're an authority, they're a governmental authority, the right of the tribes to regulate gaming on their reservation, because they're doing so under the IGRA, a federal law, as mentioned in the statute. The other savings clause reserves the jurisdiction of the federal courts. [00:07:32] Speaker 03: That would be the Section 1331. [00:07:35] Speaker 01: Yes. And that's not only 1331. I would say 2710 D7A2 as well. [00:07:42] Speaker 04: So how instructive is the Third Circuit in flattery to us? [00:07:49] Speaker 01: Pardon me? [00:07:50] Speaker 04: How instructive or informative is the Third Circuit's decision in flattery, calcium versus flattery? Flattery. [00:08:00] Speaker 01: I'm trying to remember. There's so many of those cases out there, Your Honor. [00:08:07] Speaker 01: Is that the Maryland case? [00:08:09] Speaker 04: Well, the council's event contracts, the Third Circuit held there that the event contracts are swaps subject to the CFTC's exclusive jurisdiction. [00:08:21] Speaker 01: Well, but that's in conflict, Your Honor, with the district court's decision in Martin. It's contrary to the [00:08:32] Speaker 03: Well, let me just – Is that a state – some of these are different constructions. Some are tribes versus Kalshi, and others relate of the cases that are pending to the state's relationship to Kalshi. [00:08:49] Speaker 01: That is correct. I mean, right now this court, another panel of this court, as you know, has under submission – the Hendricks case, and the Crypto.com case. And that very issue that you're asking me is before them, and I'm sure they're going to decide it. [00:09:03] Speaker 03: Is that comparable to what Judge Marguia is asking? [00:09:06] Speaker 01: Well, what she's asking is, in that case, Kalshi won, right? They moved for a preliminary injunction. The issue is whether the Commodity Exchange Act was comprehensive and preempted the enforcement of state law. [00:09:24] Speaker 01: My recollection, though, is there's nothing in the Supremacy Clause of the United States Constitution that talks about tribal law. And for that matter, and we're not talking about. [00:09:33] Speaker 04: I guess. So was the Third Circuit wrong in flattery or are you saying that the case is distinguished? [00:09:40] Speaker 01: Well, I don't I think they were wrong. [00:09:44] Speaker 01: I think Kalshi's event contracts are not swaps for all of the reasons that Judge Gordon in the Hendrickson Crypto.com case said. But I don't even think you need to go there. I mean, if you're going to go to the CEA, first of all, as you know, the special rule authorizes the CFTC to be able to determine whether certain contracts are against the public interest. They can exclude those contracts. And my position is they did just that. They exercised their discretion and they enacted 17 CFR section 40.11. [00:10:15] Speaker 01: Go ahead. So should it matter to us that – [00:10:24] Speaker 04: The fact that the commission has not used its discretionary power under section 40.11 to prohibit Kaushik's event. [00:10:34] Speaker 01: No, because the statute is not mandatory. It doesn't compel them to do so. The fact that the agency has failed to act doesn't render 40.11 inapplicable. It's still a prohibition. It still prohibits Kaushik from listing on it. Kaushik is a, a designated contract market, and they're prohibited under the regulation from listing these types of contracts that involve gaming, as Congress said in the statute, from on the exchange. [00:11:02] Speaker 03: I don't want to use up your time, but there are a lot of questions in this case. It's a complicated intersection of the various statutes. So go back in time to the Ninth Circuit case of Cabezon Ban versus Wilson. And there, of course, they Court said that California couldn't sue under IGRA to enjoin gaming activity because it wasn't covered in the tribe's compacts. [00:11:28] Speaker 01: Okay. [00:11:28] Speaker 03: Could this be called a mirror image of that? [00:11:31] Speaker 01: No. Well, so first of all, there's two Cabazon cases. Right. I'm assuming you're talking about Cabazon 2, right? Cabazon 2. Yeah. So Cabazon's clearly distinguishable from our case because in Cabazon, the tribe's had a very limited compact. They had a compact that only authorized simulcast wagering. So it was what we call an OTB compact, an off-track betting compact. That was the only compact they had. [00:12:02] Speaker 01: And the state was alleging or brought suit under 2710D7A2 alleging that the tribes were violating that OTB compact because they were engaging in illegal slot machine gambling in violation of the Johnson Act. And the court said, no, state, you can't bring that action. Why can't you bring that action? Because under this court's decision in Saquon v. Roach, the court held that the only thing that gives the state jurisdiction over gaming on Indian lands is the compact. [00:12:41] Speaker 01: And because the compact was limited to OTB, state had no jurisdiction. That's not our case. First of all, it's not the tribes that are engaging in the gambling, and the tribes aren't engaging in any illegal gambling. And the tribes do have a compact, and that compact expressly authorizes the tribe to engage in gaming, and only the tribes. [00:13:01] Speaker 03: But only gaming that's legal. [00:13:03] Speaker 01: Yes. You hear the people of the state of California with Proposition 1A said that only the tribes shall have the exclusive right to engage in gaming, and the only games they can play consistent with the IGRA that says it has to be authorized by the state, is slot machines, house banked and percentage card games, and a lottery. Where does it say anything about sportsbook gambling? And that's why you have to look at the entire body of the law. You have to look at the IGRA. [00:13:34] Speaker 01: You have to look at the gaming ordinance. You have to look at the compact. Because the IGRA, it prohibits. 1166 makes it a crime to engage in any Sportsbook gambling in violation of penal code section 337A. So there's the criminal prohibition. 2710D1 is the civil prohibition. It says you can only engage in gaming on an Indian reservation if it's authorized by the gaming ordinance, conducted in conformity with state law, and in accordance with a tribal state gaming compact. [00:14:04] Speaker 05: I just want to ask you two questions about the interaction of the IGRA and the CEA. [00:14:13] Speaker 05: Is there any relationship? How do they work together or do they not work together? [00:14:17] Speaker 01: Are they, you know, I find nothing, nothing in, in the, in the unlawful internet gambling enforcement act that preempts conflicts with supersedes or impliedly repeals the IGRA. Why? Because like, like the CEA, there's two savings clauses in, in UEGA. And, uh, It's 5361B, I think, is the first savings clause, and 5366D, I think, is the other one. [00:14:50] Speaker 01: And those two savings clauses, what they do is they remove gaming that's conducted by an Indian tribe under a tribal state gaming compact pursuant to the IGRA from the applicable provisions of UEJA. Okay. I find there's absolutely no inconsistency between the two statutes. And remember this. [00:15:10] Speaker 03: And that leaves, though, what I thought was the underlying question is the relationship between IGRA and the CEA. [00:15:19] Speaker 03: I thought that that was the question more specifically. [00:15:23] Speaker 01: Well, your Ouija doesn't authorize. [00:15:26] Speaker 03: Let's take a Ouija out of this. Let's put it to the side and say what then is the relationship between the IGRA, or you say IGRA, I say IGRA. [00:15:38] Speaker 01: I'm an IGRA person, Your Honor, but go ahead. [00:15:43] Speaker 03: What's the relationship between that statute and the CEA? [00:15:49] Speaker 01: Well, first of all, the CEA is a statute that was enacted by Congress in 1934, amended in 1974, and then the Dodd-Frank amendments come in 2010, right? It's an old statute, and Congress enacted it. [00:16:04] Speaker 01: to regulate commodities, right? That's what they wanted to do. I don't think Congress ever had in mind, and you've got, just look at the statute and the regulations in the statute. Is there any mention of Indian tribes in the statutes, Indian reservation or Indian gaming, right? [00:16:23] Speaker 01: And Congress showed a clear intent when they adopted the special rule that the CEA, you know, it wasn't about gambling. It wasn't about gaming. In fact, they were so concerned that this commodity straining might be used for gambling that they empowered the CFTC to be able to determine whether contracts that involved gaming could be excluded in violation of the public interest. [00:16:58] Speaker 01: And you have no other laws, as far as I'm concerned, like the IGRA anywhere. Why? [00:17:05] Speaker 01: Show me, cite to me a case where the United States Supreme Court has said that Congress's authority is exclusive and plenary. It's plenary. Congress has plenary authority over Indian affairs. And pursuant to that plenary authority, consistent with its trust obligation, It enacted the IGRA. And what did it do in the IGRA? It authorized the tribes to engage exclusively in gaming and enacting ordinances. [00:17:41] Speaker 01: They're not enacting their ordinances pursuant to their inherent sovereign authority alone. They are receiving congressional delegated authority so that those ordinances have the full force and effect of federal law, as does the Compact. [00:17:56] Speaker 05: Doesn't Kalashnikov essentially say that These events contracts are like commodities, certain kinds of commodities, and therefore only the Commodities Exchange Act has jurisdiction over these events contracts, whatever they are? [00:18:12] Speaker 01: Again, we go back to the so-called exclusive jurisdiction. In the Martin case, the court held that the so-called exclusive jurisdiction was was given to the CFTC vis-a-vis other federal agencies, right? So they wanted to make it clear that the CFTC regulated in this particular area and the Securities and Exchange Commission in another area. But I would put this to you. Let's just assume that calcium event contracts don't violate 40.11. [00:18:47] Speaker 01: Let's just assume that they're swaps. Let's just assume they, as a designated contract market, put them up, self-certify and put them up on the exchange. Let's just assume that their conduct off the reservation is totally legal. I put to you this. The moment that you take that legal conduct and you engage in that exact same conduct on the reservation, they're committing a crime under 1166 and they're violating the civil provisions of the IHR. And what case do I cite to you in support of that? [00:19:17] Speaker 01: United States versus Masaryk. What happened in Masaryk? [00:19:21] Speaker 01: The Masaryks were selling liquor, right? If they were engaging in a conduct off the reservation, everything they were doing was legal. They complied with all of the federal laws. They had liquor ordinance. They complied with the state's laws. The moment they took that conduct onto the reservation, the United States Supreme Court said they were committing a crime. Why? Because they were violating the tribe's liquor ordinance. And the Supreme Court said that the tribe's, enacted that liquor ordinance pursuant to congressionally delegated authority. [00:19:57] Speaker 04: Unless my colleagues have any further questions. [00:20:00] Speaker 01: I'd like to reserve what time I have left. [00:20:02] Speaker 04: You have none. I'll consider giving you a minute or two. Thank you, Your Honor. [00:20:17] Speaker 00: Good morning, and may it please the Court, Grant Mainland for Kalshi. [00:20:21] Speaker 00: There's been a lot of complexity in the argument that's happened so far, but underlying that complexity is a very simple question. Do the plaintiff's tribes have the right to sue? Under IGRA's plain text, the answer is no. The provision the tribes invoke requires conduct in violation of a tribal state compact, but there is no language in any compact or in any secretarial procedures that Kalshi could have violated here. [00:20:49] Speaker 00: Not once has IGRA been used in the manner the tribes propose here. We have found just one case, the Cayuga Nation case, where IGRA was used against a private party such as Kalshi. And even then, the private party in question was acting as an agent of the state, operating lottery terminals on Indian lands. [00:21:11] Speaker 05: So the heart of that argument is that you're off the reservation and they just can't sue you for these events contracts? [00:21:21] Speaker 00: No. Well, what I would say is we've heard a lot about ordinances already, and ordinances apply. There is no ordinance issue before this court. They brought an ordinance claim, and you would think this claim that we're talking about today is all about ordinances. It's not. They have a separate claim that we've moved to dismiss, but they did not seek a preliminary injunction on the basis of their ordinance claim. So we have contested that and we've moved to dismiss it. And the district court will be dealing with that in the future. [00:21:51] Speaker 00: But when they speak of ordinances as if this is all one big ball of wax, I think their complaint belies that because they pleaded a separate claim there. I also want to point out that under 2017, 27D1, which mentioned, that's the provision that they are seeking to vindicate here, the one that says Class III gaming is lawful only if it's authorized by an ordinance, legal under state law, and in conformance with a compact. It mentions those three things, 27D1. [00:22:24] Speaker 00: If you go to 27D7A2, it only mentions in violation of a compact. And it would have been very easy for Congress to say, It would have been very easy for Congress to say, you have a cause of action for unlawful Class 3 gaming in violation of 27D1. It didn't do that. It would have been very easy to say in violation of an ordinance. It didn't do that. The word ordinance is used all over IGRA, and it's used very differently from the way compacts are. Compacts are contracts. [00:22:53] Speaker 03: But aren't the ordinances incorporated in effect? [00:22:57] Speaker 00: No, no. And I heard counsel say that. That's my understanding or my surmise. When I saw the court's order asking about ordinances, maybe the question was provoked by the Wisconsin decision that was recently rendered in the Ho-Chunk Nation litigation. The court there expressly said the Blue Lake Compact, it's actually not Blue Lake, it's the Picayune Rancheria, is the only of these three plaintiffs that even has a compact. But with respect to that compact, it does not have the language that the court in Wisconsin found to render this a violation of a compact. [00:23:30] Speaker 00: Now, I want to be clear. We very much disagree with the Wisconsin court's interpretation. I understand that. [00:23:36] Speaker 03: But what we're trying to see here, whether the ordinances adopted, which they're required to adopt in some fashion, are really folded into the compact. And you say no. [00:23:50] Speaker 00: I say no. [00:23:52] Speaker 03: And your best authority for no is what? [00:23:56] Speaker 00: well, I think the text of the compact itself says nothing about incorporating an ordinance. It's as simple as that. And at the end of the day, we have many cases, we cite them in our brief, there are many more that say while compacts may be special, they're clearly not a normal kind of commercial contract. They are nonetheless interpreted just as any other contract would be according to their plain terms. They are not regulatory law. The tribes have cited no authority for the idea that they are generally binding regulatory law. [00:24:29] Speaker 00: And so what you do is like with any contract, you look at the text. What is the actual language that prohibits what Kalshi is doing in the compact? And in the proceedings below, they took a shot at this. They cited section 4.1c, Of the Picayune Compact, again, the only one that exists in this case. The others have secretarial procedures. [00:24:49] Speaker 04: I'm sorry, but help me understand because I thought what you were arguing is that the CFTC has exclusive jurisdiction over this matter. [00:25:02] Speaker 00: We do. That is our position. [00:25:03] Speaker 04: Okay. And so in addition, you're making this argument that you're presenting? [00:25:10] Speaker 00: What I'm saying, Your Honor, is you don't even need to reach that issue. because they have no business being in court on this particular claim. They have a particular cause of action under 27D7A2, and it requires a violation of a compact. And what they've retreated from, so you don't even need to get into how the CEA intersects with IGRA, with UGIA is what I call it, the Unlawful Internet Gambling Enforcement Act. I concede that's complicated, though we very much believe in our argument on that front, but you don't even need to reach it. [00:25:42] Speaker 00: Because there is no, they've pointed to nothing that Kalshi has done that violates any language in the only compact that's at issue here. And instead, what they do is say, well, the conduct we're engaging in is unauthorized by the compact, unauthorized. [00:25:58] Speaker 03: Okay, well, let's go to the Picayune ordinance. And it says that you can't, well, you can't have class three gaming on tribal lands unless you have a valid license to do so. [00:26:14] Speaker 03: So that kind of takes me to a, you know, maybe a fundamental question, and that is, is it your position that college sports contracts, event contracts, are not Class III gaming? [00:26:31] Speaker 00: That is our position, yes. [00:26:33] Speaker 03: Not Class III gaming at all? [00:26:34] Speaker 00: It's not Class III gaming. UGA says that a transaction on a DCM is not a better wager. [00:26:41] Speaker 00: The word gaming is not defined by IGRA. The imperi materia canon requires that we construe these different statutes together. [00:26:49] Speaker 03: But what I would say... Okay, so now put yourself like, or one of your friends is on tribal land and downloads, has Kalsi on the app and buys a contract that pays out if the Giants win, for example. [00:27:08] Speaker 03: And then... also is betting on DraftKings, same thing, that the Giants will win. [00:27:20] Speaker 03: So in your view, the first one would be allowed, the Kalshi, but not the DraftKings? [00:27:25] Speaker 00: Certainly, designated contract markets are regulated differently from regulated sportsbooks, and this is an issue. So the answer is yes. [00:27:33] Speaker 03: Somebody's standing there on tribal land. So [00:27:36] Speaker 00: Except just one nuance on that, Your Honor, is if someone's standing there on tribal land, there may be, I think we would dispute it, but there might be a better argument in that context that an ordinance would apply. And again, they've asserted an ordinance claim here. We dispute the degree to which ordinances are applicable to non-members of the tribe, but that is not before the court on this appeal. That gets into complicated issues of the Montana Doctrine, which goes to the civil jurisdiction of Indian tribes over non-members, not before this court on this appeal, because they didn't seek a preliminary injunction on their ordinance claim. [00:28:12] Speaker 00: So they've reserved whatever arguments they have as the application of ordinances to our conduct. [00:28:17] Speaker 03: But you could be a tribal. Let's take out your friend who may not be a tribal member, but put a tribal member doing the same thing. Basically, a tribal member, in your view, on tribal land can do any of the call sheet transactions. [00:28:32] Speaker 00: Well, there are a couple of different issues. One is, is that person subject to some provision of an ordinance that's binding on them? I honestly don't know the answer to that because they haven't even identified any provisions of their ordinances that they claim have been violated. But on the question of would Calshi be out of compliance, so the actual designated contract market, that's, I think, a distinct question from whether any particular tribal member on a reservation could violate an ordinance. And on that, Mr. Marston was referring to the exclusive jurisdiction provision section 2A1A, and he referred to it as allegedly exclusive jurisdiction. [00:29:10] Speaker 00: And his support for that was the savings clause, but he left out very important language. The language is, except as here and above provided, nothing herein shall supersede or limit the regulatory authority of other agencies, whether under state law or federal law. But that except as here and above provided, points back to where the CFTC was given exclusive jurisdiction. So at the end of the day, to agree that they have a claim under IGRA here would be to accept the idea that when Congress gave the CFTC exclusive jurisdiction over designated contract markets, that there are actually a 240-tribe exception to that exclusive jurisdiction, that all around the country. [00:29:55] Speaker 03: That wouldn't be so unreasonable. I mean, the whole tribal situation is a very complicated relationship. [00:30:03] Speaker 03: And so let me just go back. I just want to understand. You say that your contracts are not Class 3 gaming. [00:30:10] Speaker 00: Correct. [00:30:12] Speaker 03: That's your position. [00:30:13] Speaker 00: That is certainly our position, though we're not asking this court to rule on that issue one way or the other. [00:30:17] Speaker 05: I just want to insert a question. So then, you know, there's another little claim that's around here. It's the Lanham Act claim. Yes. The logo, what's at issue there is the logo there says, Sports betting is legal in all 50 states. [00:30:33] Speaker 00: No, Your Honor. On calci. On calci. Yes, on calci. [00:30:37] Speaker 05: And it's true. But the question was, is what calci is doing, you said it's not class three gaming. [00:30:44] Speaker 00: Yes. [00:30:46] Speaker 05: What am I missing? [00:30:49] Speaker 00: UGA also says it's not a better wager. It literally says that. It defines better wager to include sports betting. And it says... [00:30:58] Speaker 00: a better wager is not a transaction conducted on a DCM. [00:31:02] Speaker 05: This is really nuanced stuff. [00:31:04] Speaker 00: Well, actually, Your Honor, I would push back on that a little bit. I guarantee this morning, if you turned on CNBC, someone was talking about trading in shares of stock as a bet that someone took. People use the word bet colloquially all the time. But even if there is some superficial similarity, even if I will concede that when someone trades on Kalshi, with respect to whether the Knicks are going to win that game, that that has some similarity to doing the same thing on DraftKings. But it's certainly regulated differently. [00:31:34] Speaker 05: Like a bet to me, but I'm not, you know, that's really out of the point. [00:31:39] Speaker 00: It's certainly off to, I mean, that is an issue that the states have been pushing and that is before a different panel of this court. It's certainly not something that the court doesn't get into for purposes of this. [00:31:48] Speaker 05: I understand that. I'm just curious, when you said that what Calci is doing is not class three gaming. [00:31:56] Speaker 00: I'm saying for purposes of the application of the statute. And I do want to point to UGA. I recognize I'm nearly out of time, but that statute, if all we had here was the CEA being given exclusive jurisdiction and then IGRA being passed, creating whatever construct it does for the intersection of the federal government, the states, the tribes with respect to Indian gaming. If that's all we had, this might be a thorny case. But it is an unusual situation where it's not all we have. [00:32:28] Speaker 00: At the time, as this court recognized in the Epi Nation case, the Internet was not on the mind of Congress. And I get that technologies advance and you still need to apply statutes. But what's really unusual here is years later, when the Internet came into fruition and was widely used, Congress turned its attention to Internet gambling and particularly gambling. this issue of local application of law, of this is the way we want to do things on our reservation, this is the way we want to do things in this state or that state. [00:32:58] Speaker 00: And in that particular context, that's exactly the structure that they're trying to vindicate here, that when we, when someone places a trade on a reservation, that that is, that should be subject to IGRA. In that context, the Congress determined that transactions on designated contract markets would be carved out from that framework. [00:33:20] Speaker 05: In other words, then UIGEA displaces? [00:33:27] Speaker 00: No. No. It doesn't alter anything. It is the CEA that has preemptive effect. [00:33:34] Speaker 05: Then the CEA displaces. [00:33:37] Speaker 00: Well, the CEA predated the 1974 amendments to the CEA, which is what created the CFTC and gave it exclusive jurisdiction. Mm-hmm. predated the 1988 passage of IGRA. So the CEA is what's doing the work. And what Congress was doing in 2006 with UGA is saying, we don't want to undermine that by letting people come in and start regulating DCMs as gambling. We're going to say that even if it would otherwise be captured by this definition, it's not a better wager. [00:34:08] Speaker 00: It's not subject to the statute. [00:34:09] Speaker 04: So in your view, CEA and IGRA coexist? [00:34:15] Speaker 00: Yes, just in different worlds. [00:34:17] Speaker 04: But our position... So CEA does not supersede IGRA? [00:34:22] Speaker 00: Well, so with respect to transactions on DCMs, there is a single statute that governs it. And my point only is that with respect to regulation of gaming on Indian reservations... So on Indian reservations, the tribes... [00:34:41] Speaker 04: have to follow CEA in saying what they perceive as a bet is not a bet, it's a swap? [00:34:48] Speaker 00: No. [00:34:48] Speaker 04: So that's why I'm having trouble here. So if you can sort that out for me. [00:34:53] Speaker 00: So the way I think about it is you've got the CEA, which governs the overall derivatives markets. Now we have people, the tribes are saying it, the states are saying it, that this is really just gambling. But we obviously dispute that. And that's the different issue. That's before a different panel of this court, whether state law is preempted by federal law. [00:35:13] Speaker 00: Then there's IGRA, which gets passed in 1988 and unquestionably deals with casinos. I mean, generally, they're not doing any sort of sportsbook activity because it's not legal in California. But that's a gambling statute. [00:35:28] Speaker 04: Betting. [00:35:29] Speaker 00: Betting, sure. Absolutely, because they operate casinos on their reservations. That's very different from what we do. And then under UGIA, you have a construct that's designed to ensure that local law is respected and can't be evaded through the internet. And one thing's really notable about this, and the district court noticed this below, is that there is a safe harbor under UGA for intrastate and intratribal transactions. So even if the tribes, they don't do it today by and large, I don't know if they do it at all, but if they try to do sort of like a DraftKings type thing, and they do it within their own reservation, That's not subject to UGIA because that can just be straightforwardly regulated either under IGRA or under their own ordinances. [00:36:15] Speaker 03: Let me just flip it. Let's say the CFTC has a change of heart and they completely prohibit what you call sports event contracts. [00:36:28] Speaker 03: But we have an Indian tribe out in the West in a state – that permits this kind of gaming, gambling, whatever you want to call it. So if the tribe wants to then enter into a contract with Kalshi, even though the CFTC has said, well, it's not really in the public interest and we have that discretion, could the tribe do that? [00:36:58] Speaker 00: I think the issue there is that these tribes are not designated contract markets. That's not something you just... go out and launch one. It was a years-long process for Kalshi to become one. It's a very specific regulatory application. It requires, and to be a designated contract market, you need to be operating nationally. These are national operations. [00:37:19] Speaker 03: But Kalshi has now been restricted, let's say, in this hypothetical, this change of heart hypothetical, but why couldn't it enter into a contract or subcontract or relationship with the tribe to say, okay, we're kind of barred out there, but now we have this opportunity because tribal land is different. Could they do that? [00:37:45] Speaker 00: No. I mean, if the CFTC says we are regulated by the CFTC, it's our exclusive regulator, and if they tell us we can't do something, we can't do it, and we abide by that. And with respect to this 4011 provision that's been referred to that, you know, the allegation that the CFTC has already banned these contracts, Even if that's true, we very much dispute it. It ignores 4011C and the public interest review process that the CFTC undertakes. But even if that's true, all it means is that we are regulated by the CFTC, not by 240 different Indian tribes around the country. [00:38:22] Speaker 00: Thank you. Unless the court has anything further. Thank you very much. [00:38:24] Speaker 05: Thank you. [00:38:34] Speaker 02: Good morning, Your Honors. Antony Ryan on behalf of Robin Hood. This court can affirm the ruling below either on the lack of likelihood of success on the merits or on the other winter factors. I'd just like to briefly on the merits answer the question, Your Honor, about the incorporation by reference of ordinances into the compact. In the Ho-Chunk case in the Western District of Wisconsin, At ECF 41-1, the Ho-Chunk compact is in the record in that case, and paragraph 22 of that compact has the incorporation by reference language on which the court in that Ho-Chunk case relied. [00:39:20] Speaker 02: That language cannot be found anywhere. It is not contained in the Picayune record. [00:39:28] Speaker 02: Rancheria Compact, which is at ER 119 to 179 of the record here, or in either of the two other tribes' secretarial procedures. So that alone distinguishes that. There's a private right of action. Private action belongs to either Indian tribes or states. [00:39:45] Speaker 02: A right of action under Section 2710D7. It is not a right of action, as this Court has held in the Hine and Wilson cases, not a right of action. for every violation of IGRA, only for the three enumerated items, and that's violations of the compact, which don't include ordinances. An alternative ground for affirmance here is that there's been no showing of irreparable harm to the plaintiff tribes. [00:40:19] Speaker 03: But that wouldn't, normally we wouldn't look at that on appeal. That wasn't reached, right? [00:40:25] Speaker 02: That was not reached below. There certainly are cases where the court has affirmed denial of a PI motion on other grounds, including failure to show irreparable injury. That's exactly what happened in the Big Country Foods case, 868F21085. The court there below did not consider irreparable injury, and that was the ground on which the Ninth Circuit affirmed denial of PI. [00:40:55] Speaker 02: a PI motion because it was an easy, straightforward grant. Same is equally true here. And in fact, in that Ho-Chunk case, the court there denied a PI, among other things, on the ground that there was no irreparable injury shown either. There's no showing that there's going to be diversion of customers from in-person Class 3 gaming, casino-type gaming, to event contracts on a DCM. [00:41:25] Speaker 02: No showing whatsoever. Even if there were diversion, that would be compensable by monetary damages. So there's no showing that there's irreparable harm. And so against the showing of no irreparable harm on the tribe's parts, there's a very clear and detailed showing that both Kalshi and Robin Hood would suffer substantial burdens from the entry of a PI. [00:41:49] Speaker 03: Money, right? Monetary. [00:41:53] Speaker 02: Yes, but ones that would not be recoverable ultimately. They would be substantial impact to a nationwide event contract business that would be not recoverable ultimately in monetary damages. They are the status quo, and that should not be upset, absent a clear showing that the burdens tip in the tribe's favor, and here they do not. [00:42:19] Speaker 04: Thank you. [00:42:20] Speaker 02: Thank you. [00:42:22] Speaker 04: Mr. Marston, you don't have time, but I do want you to respond to this statement from Mr. Mainland that you have these separate claims regarding IGRA and the ordinances. [00:42:39] Speaker 01: We brought a cause. We moved for a preliminary injunction on the grounds they were violating the provisions of our compact and procedures. We didn't need to bring a claim that they were violating the ordinance because just as I said, the compact incorporates the gaming ordinance into the compact. I would direct your attention to the PICU in 1999 compact section 6.1. All gaming activities conducted under this gaming compact shall, at a minimum, comply with a gaming ordinance duly adopted by the tribe. I would direct your attention to section 6.1a of the Blue Lake and Chicken Ranch procedures. [00:43:15] Speaker 01: These secretarial procedures, including amendments, shall be incorporated into the tribal gaming ordinance. Section 6.1B of the tribe's Blue Lakes and Chicken Ranch procedures says, all gaming activities conducted under these secretarial procedures shall comply with a gaming ordinance duly adopted by the tribe. If you go to the gaming ordinances, Blue Lake Rancheria's gaming ordinance, Section 5.01, all gaming activities on the reservation are prohibited except as expressly authorized under this ordinance. [00:43:47] Speaker 01: If you look at Picayune's Section 15, of their compact. In addition to the provisions set forth above, no Class III gaming shall be engaged in on the reservation unless it is conducted in accordance with the provisions of any applicable tribal state gaming compact in accordance with the IGRA. Chicken Ranch's Gaming Ordinance Section 12, in addition to these provisions set forth above, no Class III gaming shall be engaged in on the rancheria unless it is conducted in accordance with the provisions of any applicable tribal state gaming compact obtained in accordance with the provisions of the IGRA. [00:44:21] Speaker 01: And let's not forget that the IGRA contains the sole proprietary ownership provision. What does that section say? What did Congress say? Only the tribes can own the gaming operations, and only the tribes can regulate the gaming operations. To implement that section, the tribes in their gaming compact for PICU in Section 6.2 says tribal ownership, management, and control of the gaming operation. The gaming operations authorized under this gaming compact shall be governed solely by the tribe. [00:44:56] Speaker 03: When I asked your position that your offering is not a class three gaming, they say no. [00:45:07] Speaker 01: Well, that's absurd. [00:45:10] Speaker 01: All you have to in order to for the court to exercise jurisdiction, we have to show a they're engaging in class three game B. [00:45:20] Speaker 01: They're conducting it on our Indian lands. And C, they're violating the compact. That's a 2710D7A2. [00:45:27] Speaker 03: But what we do is not class three gaming. [00:45:31] Speaker 01: Well, I would direct the court's attention to 25 U.S.C. Section 27038, which defines class three gaming. Congress defined class three gaming as all gaming, all gaming. That's not class one or class two. They're not going to argue that. They're playing traditional Indian games. It's class one. And class two is limited to non-House Bank card games, bingo, and lotto. So clearly, sports betting is a class three game. [00:46:03] Speaker 01: But more importantly, if you look at 25 CFR Section 5024C, the regulations promulgated by the National Indian Gaming Commission to implement the IGRA, they specifically define sports betting betting as a class three game. Moreover, if you look at the secretary of the interiors regulations, 25 CFR 293, two D they specifically say that class three gaming is any, that, that any gaming that meets the definition of class three gaming and contains the elements of prize chance or consideration is a class three game. [00:46:43] Speaker 01: I go on couch, couch. I go on, uh, the Blue Lake Rancheria, and I saw an ad on ESPN, and there's a lot of them, advertising calci. And I decide, well, what's that about? So I pick up my cell phone, which any of you judges can do right now, and I see a calci app, and I download the app. Oh, gee. So Brazil is playing, you know, Venezuela today in the World Cup. I decide I want to bet on it. [00:47:15] Speaker 01: So I place a bet, right? I put some money up on their app, and whether I am paid money is going to be determined by the outcome of a physical contest, a game. If it walks like a duck, it quacks like a duck, it's a duck. They're gaming. [00:47:35] Speaker 03: Well, his answer to my hypothetical was if it were Drafts King or some other like, it would be prohibited, but not Kalsi. [00:47:42] Speaker 01: Well, the... [00:47:45] Speaker 01: as I said before, the moment they come onto the reservation and they, because the statute says enjoying any Class 3 gaming activity. So you have to look at their conduct. Does it meet the requirements of Class 3 gaming? Yes, it falls within the definition. Are they conducting it on our Indian lands? The United States Supreme Court in the Bay Mills case says they are. And Bay Mills, what they said is You don't look to where the servers are, the computers are. [00:48:15] Speaker 01: What you do is you look to where the patron is placing the bet. It's where every roll of the dice and spin of the wheel takes place. And I go on to the reservation, I download their app, and I think, you know, Brazil's going to win. I place my bet or my wager, and if my team wins that physical contest, that sporting event, I get paid. That's gambling. [00:48:39] Speaker 04: Thank you. Thank you very much. The case of Blue Lake Rancheria versus Kalshi and Robin Hood markets is now submitted. Mr. Marston, Mr. Mainland, Mr. Ryan, thank you very much for your oral argument presentations here today. We are adjourned.