Case 2:25-cv-00575-APG-BNW Document 237 Filed 11/24/25 Page 12 of 29
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At the November 14, 2025 hearing before me, Kalshi argued that this language means “the event itself has to have potential financial, commercial, or economic consequence. It can’t be an event that makes another financially consequential event more or less likely to occur.” ECF No. 219 at 19. But by Kalshi’s own argument, financial consequences of games based on their impact on downstream externalities like hotel room rentals, food sales, advertising dollars, or the fact that people bet on it cannot suffice because a game only makes room rentals, food sales, advertising, or bets more or less likely to occur. Later in the hearing, Kalshi argued that the potential financial consequences must be “extrinsic to the parties to the contract.” Id. at 42. That would include anything imaginable about a potential downstream financial consequence, including that two other people who are not parties to the contract might bet on it. Just like Kalshi’s interpretation of the other words in the statute, its interpretation of potential financial consequences knows no limiting principle. Congress did not define a swap as a contract on anything that happens or could happen. So interpreting the statutory terms to include everything anyone can conjure up as a subject to bet on, or that might have some conceivable financial consequence if one is creative enough, is not a reasonable interpretation of the statute. Like the words “event” and “contingency,” I must give these words a reasonable and coherent meaning within the statutory context that does not lead to absurdities. I conclude that the phrase “associated with a potential financial, economic, or commercial consequence” means that the event or contingency is itself inherently joined or connected 1 with a potential financial,
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1 The parties in Robinhood agree that “associated with” means joined or connected to, although they dispute what that means in terms of the degree of association between the event or contingency and the financial consequences called for in the statute. See 2:25-cv-01541-APG- DJA, ECF Nos. 25 at 9-10; 47 at 4. Kalshi did not specifically define “associated with,” but like
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