Case 2:25-cv-01541-JCM-DJA Document 7 Filed 08/19/25 Page 21 of 31
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This is precisely what the event contracts traded on Kalshi’s exchange are. Sports-related event contracts are within these statutory definitions of swaps and transactions in excluded commodities because: (i) they are binary contracts that pay out depending on the occurrence or non-occurrence of a future event that is beyond the control of the parties to the contract; and (ii) the underlying sporting events they concern have economic consequence. See KalshiEx , 2025 WL 1073495, at *5 n.3; KalshiEx (D.N.J.) , 2025 WL 1218313, at *2, *6. With respect to the latter requirement, wins and losses in sporting events have obvious, significant financial consequences for the players, the teams, the owners or the schools they represent, their communities, the television networks that cover the matches, and other stakeholders. See KalshiEx (D.N.J.) , 2025 WL 1218313, at *6 (“Defendants argue that sporting events are without potential financial, economic, or commercial consequence. On the record before me, I disagree.”). For example, wins can increase the value of the franchise, leading to more ticket sales, more revenue from sponsorships, merchandise, parking, and food at games, and more TV viewership, as the Florida Panthers experienced after winning the 2024 Stanley Cup. Orsini Decl. ¶ 5. Sporting events also generate economic boons for the cities in which they take place; the New York Knicks’ 2025 postseason generated an estimated $195 million in economic activity from home playoff games. Id. ¶ 6. Sporting events also impact the advertising revenue to television networks that broadcast them; when this year’s NBA Finals went the full seven games, ABC’s sports viewership increased 17% during the month the games took place compared to the previous month. Id. ¶ 7. The CEA expressly grants the CFTC “exclusive jurisdiction” over all “transactions involving swaps or contracts of sale of a commodity for future delivery” that are “traded or executed on a contract market designated” by the CFTC. 7 U.S.C. § 2(a)(1)(A). The CEA also includes a separate provision entitled “Special rule for review and approval of event contracts and swaps contracts,” which confirms that the CFTC has authority over “the listing of agreements, contracts, transactions, or swaps in excluded commodities that are based upon the occurrence, extent of an occurrence, or contingency (other than [certain exemptions]), by a
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