Case 2:25-cv-00978-APG-BNW Document 105 Filed 10/14/25 Page 17 of 27
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§ 1a(47)(A)(ii) the way Crypto reads that section, there would be no need for Congress to define a swap to include credit default swaps in 7 U.S.C. § 1a(47)(A)(iii). Crypto’s position, that its live presentation event contracts are swaps, would sweep nearly all sports wagering into the CFTC’s exclusive jurisdiction even though the states historically have regulated gambling through their police power. According to Crypto’s arguments and self-certification to the CFTC, 10 nearly every sports bet would be a transaction in which payment is dependent on the outcome of a sporting event and is associated with a potential financial, economic, or commercial consequence. 11 That cannot be a proper reading of the statute because that would mean that all sports wagering must be done on a DCM, and not at casinos, as the CEA forbids nearly all swap dealing and trading unless done on a DCM, except for certain market participants, none of whom are casinos or the average sports bettor. 12 The 10 See ECF No. 15-3 at 3, 8-12. 11 I need not and do not address in this order whether a particular event contract has a potential financial, economic, or commercial consequence within the CEA’s meaning. 12 See 7 U.S.C. § 2(e) (“It shall be unlawful for any person, other than an eligible contract participant, to enter into a swap unless the swap is entered into on, or subject to the rules of, a board of trade designated as a contract market under section 7 of this title.”); id. at § 1a(18) (defining “eligible contract participant” to include certain financial institutions, insurance companies, investment companies, commodity pools, governmental entities, regulated securities brokers or dealers, futures commission merchants, regulated floor brokers or traders, and individuals who have millions of dollars invested on a discretionary basis); id. at § 6d(a) (making it unlawful to be a futures commission merchant unless the person is registered with the CFTC); id. at § 1a(28)(A)(i)(I)(aa)(CC) (defining futures commission merchant to mean a person or entity that is “engaged in soliciting or in accepting orders for . . . a swap”); id. at § 7b-3(a)(1) (“No person may operate a facility for the trading or processing of swaps unless the facility is registered as a swap execution facility or as a designated contract market under this section.”); id. § 6s(a)(1) (“It shall be unlawful for any person to act as a swap dealer unless the person is registered as a swap dealer with the Commission.”); id. § 1a(49) (defining a “swap dealer” to mean “any person who . . . holds itself out as a dealer in swaps; . . . makes a market in swaps; . . . regularly enters into swaps with counterparties as an ordinary course of business for its own account; or . . . engages in any activity causing the person to be commonly known in the trade as a dealer or market maker in swaps”). The CEA provides exceptions from being a swap dealer for “an insured depository institution . . . to the extent it offers to enter into a swap with a customer in connection with originating a loan with that customer;” a person who “enters into
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