Case: 2:25-cv-01165-SDM-CMV Doc #: 69 Filed: 03/09/26 Page: 19 of 21 PAGEID #: 912
discretion,” frustrating Congress’s intent to centralize regulation of futures trading
markets. 8 ( Id ., 17.)
First, Kalshi overstates Congress’s intent. As explained above, the CEA’s
text, structure, and history support the conclusion that Congress did not intend to
preclude any and all state action relative to DCMs. See, e.g. , 7 U.S.C. §§ 7(a)(1)(A),
16(e)(1). And further, Kalshi overstates its authority. Though a DCM can list any
contract that it self-certifies, the certification does not carry the force of law. Said
another way, the DCM can certify, but cannot conclude, that the contract is lawful.
That authority rests with the CFTC and, if in dispute, with the courts.
Here, in fact, the CFTC prohibits DCMs from listing any event contract “that
involves, relates to, or references . . . gaming[.]” 17 C.F.R. § 40.11(a). That includes,
by Kalshi’s own admission (albeit in separate litigation), “a contract on who’s going
to win the Kentucky Derby” or “the point spread in the Super Bowl[.]” KalshiEx
LLC v. Commodity Futures Trading Comm’n , D.D.C. Case No. 1:23-cv-3257-JMC
(Oral Arg. Tr., ECF No. 40, 14:9–13). Accord KalshiEx LLC v. Commodity Futures
Trading Comm'n , No. CV 23-3257 (JMC), 2024 WL 4164694, at *8, *10 (D.D.C.
Sept. 12, 2024) (adopting Kalshi’s position that “gaming” as used in the CEA “refers
to playing games or playing games for stakes”). This Court does not endeavor to
explain why the CFTC has not exercised its authority under the Special Rule or
§ 40.11(a) with respect to the sports-event contracts. But the agency’s inaction is not
8 Kalshi points out that the CEA seeks to establish nationwide standards for futures markets—but Congress has done the opposite with gambling, leaving that topic for the states to govern on a state-by-state basis.
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