Case 3:25-cv-06162-JSC Document 35 Filed 09/04/25 Page 10 of 34
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I.
INTRODUCTION
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Defendants Kalshi Inc. and KalshiEX LLC (“Kalshi”) are engaging in sports betting, which
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is class III gaming as defined in the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701-2721
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(“IGRA”). Kalshi initially made a name for itself by offering controversial contracts allowing
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consumers to bet on the outcome of the 2024 Presidential election, which Kalshi claimed was
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distinct from gaming. In a matter of months, however, Kalshi expanded from betting on election
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results to single game bets on the outcomes of the Super Bowl and the March Madness college
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basketball tournament, and has now expanded to prop bets on player performance, point spread,
and over/unders. 1 And as of September 2, 2025, Kalshi has self-certified a contract that would
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allow for parlays on sporting events. 2
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Kalshi has admitted 3 that its sports event contracts constitute gaming under the
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Commodities Exchange Act, 7 U.S.C. § 1, et seq. (“CEA”) and the Commodities Futures Trading
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Commission’s (“CFTC”) regulations, and has advertised its contracts as sports betting to target a
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consumer demographic interested in sports betting. Kalshi is intentionally entering the field of
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class III gaming, which subjects Kalshi to regulation under IGRA when its app-based gaming
reaches consumers on Plaintiff Tribes’ “Indian lands.” 25 U.S.C. §§ 2703(4)(A)-(B). 4
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Kalshi claims that its activities are commodities contracts or swaps (“gaming contracts” or
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“contracts”) regulated by the CFTC pursuant to the CEA and, because the CFTC has not chosen
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to review its gaming contracts, Kalshi’s contracts comply with the CEA and the CFTC regulations.
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1 NOTICE OF MOTION AND MEMORANDUM OF POINTS AND AUTHORITIES [ Case No.: 25-cv-06162-JSC] 4 IGRA defines Indian lands as “all lands within the limits of any Indian reservation; and . . . any lands title to which is either held in trust by the United States for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to restriction by the United States against alienation and over which an Indian tribe exercises governmental power.” 25 U.S.C. § 2703(4). 1 Dustin Gouker, News: Kalshi Can Now Offer Point Spreads, Totals And TD Props For Football Games , Event Horizon (Aug. 18, 2025), https://nexteventhorizon.substack.com/p/news-kalshi- can-now-offer-point-spreads-totals-football. 2 KalshiEX LLC – CFTC Regulation 40.2(a) Notification Regarding the Initial Listing of the “Will <outcomes> occur in <events>?” Contract, Commodity Futures Trading Commission (Sep. 2, 2025), https://www.cftc.gov/sites/default/files/filings/ptc/25/09/ptc09022529868.pdf. 3 Appellee’s Br. at 17, KalshiEX LLC v. CFTC , No. 24-5205, 2024 WL 4802698 (D.C. Cir. Nov. 15, 2024); Defs.’ Opp’n to Pl.’s Mot. for Prelim. Inj., Doc. 26 at 20, 27, KalshiEX, LLC v. John A. Martin, et al. , 1:25-cv-01283-ABA (D. Md. May 9, 2025).
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