Case 2:25-cv-00575-APG-BNW Document 45 Filed 04/09/25 Page 14 of 17
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because an event contract involves gaming “if it is contingent on a game or game-related event” such as “the Kentucky Derby, Super Bowl, or Masters golf tournament.” KalshiEX LLC v Commodity Futures Trading Comm’n , 2024 WL 4802698, at *17 (Appellee’s Br.). But even if Kalshi’s sports contracts involve “gaming,” that would not subject Kalshi to state gaming laws. Rather, it would subject Kalshi to the special rule that allows the CFTC to conduct a public interest review. The CFTC at least so far has allowed Kalshi to offer its sports contracts. At the hearing, the defendants noted that other States have taken an interest in Kalshi’s contracts and have sent or intend to send Kalshi cease-and-desist letters. But that merely highlights the problem of allowing the States to regulate a national exchange. It raises the possibility that another State would have different rules than not only than the CFTC, but other States. Preventing the difficulties that would create is the reason Congress granted the CFTC exclusive jurisdiction over CFTC-designated exchanges. Thus, Kalshi has shown a likelihood of success on the merits. Conversely, the defendants have not shown a likelihood of success on their countermotion for injunctive relief, so I deny their motion. III. Likelihood of Irreparable Harm Kalshi has met its burden of showing a likelihood of irreparable harm. The defendants have threatened Kalshi with imminent civil and criminal enforcement if it does not stop offering these contracts in Nevada. ECF No. 1-2. Although the defendants downplayed these threats in their opposition, the Board’s letter ordered Kalshi to cease and desist and gave Kalshi a deadline to comply. Id. The defendants refused to extend briefing in this case to allow for the legal dispute to be resolved on a non-emergency basis, and the defendants requested that I enjoin Kalshi. Kalshi thus has shown the threat of prosecution is imminent.
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