Case 2:25-cv-00575-APG-BNW Document 45 Filed 04/09/25 Page 6 of 17
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As for the defendants’ arguments that Kalshi did not comply with NRS § 41.031(2) and failed to fully complete service as of the date of the injunction hearing, these issues are easily resolved through amendment and service. There is no dispute the defendants received actual notice, accepted service by email, 2 filed a responsive brief and motion, appeared at the hearing, and requested that I grant injunctive relief in their favor. But even if the Board and Commission are not properly named, that would not undermine either subject matter jurisdiction or likelihood of success on the merits with respect to the individuals named in their official capacities, so I address Kalshi’s and the defendants’ motions for injunctive relief. C. Preemption Due to CFTC’s Exclusive Jurisdiction Kalshi contends that because it is a CFTC-designated exchange, it is subject only to the CFTC’s exclusive jurisdiction. The defendants respond that neither the CEA’s text nor its history suggests that Congress intended to preempt state gaming laws, so Kalshi is subject to Nevada’s comprehensive gaming regulatory scheme. The CFTC regulates financial derivative markets. “A derivative is a financial instrument or contract whose price is directly dependent upon (i.e.[,] derived from) the value of one or more underlying assets—for example, commodities (like corn and wheat), securities, or debt instruments.” KalshiEX LLC v. Commodity Futures Trading Comm’n , No. 23-3257 (JMC), 2024 WL 4164694, at *1 (D.D.C. Sept. 12, 2024) (quotation omitted). Derivatives “provide a way to transfer market risk or credit risk between two counterparties.” Id. (quotation omitted). Event contracts are a form of derivative in which the “payoff is based on a specified event, occurrence, or value.” Id. at *2 (quotation omitted). “These contracts usually pose a yes-or-no question. The
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2 See ECF No. 31-5 at 2 (defense counsel Whelan stating that she was “able to accept service on behalf of defendants”).
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