Case 4:25-cv-14092-SDK-KGA ECF No. 29-1, PageID.508 Filed 01/26/26 Page 19 of 32
potentially other kinds of class III gaming) while allowing for-profit companies like Coinbase to run internet casinos pursuant to their own private regulations. What’s more, if sports-betting contracts are “swaps” subject to the exclusive jurisdiction of the CFTC, as Coinbase maintains, then all off-market sports betting—including sports betting conducted by the Michigan Tribes and other tribes under IGRA—is prohibited by the CEA. See KalshiEX, LLC v. Hendrick , No. 2:25-cv-575, 2025 WL 3286282, at *1 (D. Nev. Nov. 24, 2025), appeal filed , No. 25-7516 (9th Cir.). With one inapplicable exception, the CEA prohibits off- market swaps. See 7 U.S.C. § 2(e). Consequently, if all sports-betting contracts are swaps, “then all sports betting must be done on a [Designated Contract Market (DCM)].” N. Am. Derivatives Exch., Inc. v. Nevada Gaming Control Bd. ( Crypto.com ), No. 2:25-CV-978, 2025 WL 2916151, at *9 (D. Nev. Oct. 14, 2025), appeal filed , No. 25-7187 (9th Cir.). Coinbase’s argument thus does double violence. On one hand, Coinbase’s preemption argument sweeps aside Congress’s recognition that “Indian tribes have pooled and players bet against each other rather than a “house”—is considered gaming. See MCL § 431.302(o) (defining “pari-mutuel wagering” to mean “the form or system of gambling in which the winner or winners divide the total amount of money bet, after deducting the net commission”). Another example is provided in the IGRA regulations, which define class II gaming to include, among other things, nonbanking card games that are necessarily played without a house. 25 C.F.R. § 502.3(c).
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