Case 2:25-cv-00978-APG-BNW Document 105 Filed 10/14/25 Page 20 of 27
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wagers on events like the Super Bowl or the Kentucky Derby as the type of “supposed ‘event contracts’” that the CFTC had “the power to, and should, prevent . . . because they exist predominantly to enable gambling.” Id. at S5906-07 (“It would be quite easy to construct an ‘event contract’ around sporting events such as the Super Bowl, the Kentucky Derby, and Masters Golf Tournament. These types of contracts would not serve any real commercial purpose. Rather, they would be used solely for gambling.”). With this congressional intent in mind, the CFTC stated when promulgating its regulations that “the term ‘gaming’ requires further clarification and that the term is not susceptible to easy definition.” Provisions Common to Registered Entities , 76 Fed. Reg. 44776, 44785 (July 27, 2011) (to be codified at 17 C.F.R. pt 40). So the CFTC “solicited public comments on the best approach” for addressing the “potential gaming aspects of some event contracts and the potential pre-emption of state laws.” Id . (quotation omitted). The CFTC ultimately decided “to prohibit contracts based upon the activities enumerated in [the special rule] and to consider individual product submissions on a case-by-case basis under § 40.2 or § 40.3.” Id. The CFTC specifically stated that its “prohibition of certain ‘gaming’ contracts is consistent with Congress’s intent to prevent gambling through the futures markets and to protect the public interest from gaming and other events contracts.” Id. at 44786 (simplified). “Pre-emption fundamentally is a question of congressional intent.” Eng. v. Gen. Elec. Co. , 496 U.S. 72, 78-79 (1990). Congress did not intend for gaming to be conducted on DCMs, and it defined swaps and enacted the special rule to achieve this intent. Thus, based on the statutory language and Congressional intent, Crypto’s contracts on the outcome of live events are not “swaps” that fall within the CFTC’s exclusive jurisdiction in 7 U.S.C. §2(a)(1)(A). Crypto’s motions for judgment on the pleadings and for a preliminary injunction depend on its argument
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