Case 2:25-cv-00575-APG-BNW Document 237 Filed 11/24/25 Page 16 of 29
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on an organized market or over-the-counter”; and (3) “[i]nvolve an asset of which the consumer is the owner or beneficiary, or that the consumer is purchasing, or they involve a service provided, or to be provided, by or to the consumer.” Id. at 48247. Sports wagers do not contain payment obligations that are severable from the contract itself. They are not (until Kalshi and other DCMs started offering them) traded on organized markets. They involve a service provided to the consumer as entertainment. And sports wagers have not historically been considered swaps. See id. at 48248 (stating that the CFTC and SEC “do not intend to suggest that many types of consumer and commercial arrangements that historically have not been considered swaps are within the swap or security-based swap definitions.”). During the November 14, 2025 hearing, Kalshi stated that the CFTC has expressed that there are “some customary consumer transactions that you would expect to happen off exchange.” ECF No. 219 at 35. I agree that sports bets are in that category. Kalshi characterizes its sports-related event contracts in various ways, but at bottom, they are sports wagers. As Justice Potter Stewart famously said about pornography in his concurrence in Jacobellis v. State of Ohio , “I know it when I see it.” 378 U.S. 184, 197 (1964). These are sports wagers and everyone who sees them knows it. That includes Kalshi, who has advertised itself as the “first app for legal sports betting in all 50 states.” See Martin , Case No. 1:25-cv-01283-ABA, ECF No. 28-2 at 3. 6 Kalshi has not disputed that is how it advertised itself, nor has it successfully distinguished its arguments here from its own plain words. Finally, my interpretations comport with the traditional balance between state and federal regulation of gaming. In contrast, Kalshi’s proposed reading upends that regime with no
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6 I can consider the exhibits in the Martin case because I can consider hearsay “in deciding whether to issue a preliminary injunction” or TRO. Johnson v. Couturier , 572 F.3d 1067, 1083 (9th Cir. 2009).
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