Case 2:25-cv-00575-APG-BNW Document 45 Filed 04/09/25 Page 9 of 17
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they are not in the public interest. Id. Kalshi sued the CFTC under the Administrative Procedure Act, asserting the decision was arbitrary, capricious, contrary to law, and exceeded the CFTC’s statutory authority. Id. at *6. The district court ruled in Kalshi’s favor. Id. at *13. The CFTC appealed to the D.C. Circuit and requested a stay of the lower court’s judgment pending appeal, but the D.C. Circuit denied the stay because it concluded that the CFTC did not show irreparable harm. KalshiEX LLC v. Commodity Futures Trading Comm’n , 119 F.4th 58, 60 (D.C. Cir. 2024). The D.C. Circuit held oral arguments in January 2025 and has not yet issued a decision. As for Kalshi’s sports-based event contracts, the parties represented at the hearing that Kalshi began offering those in late January 2025. Kalshi represents that the CFTC has allowed its sports-based contracts to proceed. ECF No. 1 at ¶ 53; see also 7 U.S.C. §§ 7a-2(c)(1), (5)(C)(i-iv) (providing that a registered entity may list a new contract by providing it to the CFTC and certifying it complies with the CEA and regulations, and that becomes effective unless the CFTC prohibits it). I have no evidence that (at least thus far) the CFTC has taken action to prevent Kalshi from offering sports-based event contracts. As a result, at this point in time, federal law allows Kalshi to offer both sports and election-based event contracts on its exchange. That raises the question of whether Nevada regulatory authorities can nevertheless pursue Kalshi for violating Nevada law by listing these same contracts. Kalshi argues the defendants cannot because the CEA preempts state law due to the CFTC’s exclusive jurisdiction over a DCM that the CFTC designates, which Kalshi is. The defendants contend that Congress did not manifest a clear intent under the CEA to occupy the field of gaming laws or to preempt traditional state police powers.
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