regulatory agency to adopt federal standards and protect tribal gaming as a means of generating tribal revenue. 25 U.S.C. § 2702. Congress made it abundantly clear that tribes—not private entities—must benefit from any gaming conducted on their Indian lands. See 25 U.S.C. § 2710(b)(2)(A), (d)(2)(A). For many tribal governments, gaming is not merely a “commercial” endeavor; rather, it is essential to their self-determination. See Chicken Ranch Rancheria of Me- Wuk Indians v. California , 42 F.4th 1024, 1032 (9th Cir. 2022) (“Class III gaming is not only a source of substantial revenue for tribes, but the lifeblood on which many tribes ha[ve] come to rely .” (internal quotations and citations omitted) (emphasis added)). B. Congress Did Not Repeal IGRA or Prohibit Tribes from Conducting Sports Wagering When It Enacted the CEA’s Definition of a “Swap” in 2010. Kalshi does not assert that its conduct complies with IGRA. In fact, Kalshi has made no attempt to ensure that its sports-wagering activities on Indian lands across the country comply with IGRA. Instead, Kalshi argues that Congress’s definition of a single term—“swaps”—within a statute whose entire purpose is to address the risk, discovery, and dissemination of commodity prices, 7 U.S.C. § 5(a)–(b), effectively repealed core provisions of IGRA. Under this theory, Congress silently stripped away tribes’ and states’ longstanding authority over sports betting 3 (and 3 Kalshi also suggests that its sports-event contracts are not gaming because there is no betting against the “house.” Not so. A “house” is not a necessary element of gaming. For example, pari- mutuel wagering—a type of betting system where all bets or wagers are pooled and players bet against each other rather than a “house”—is considered gaming. See, e.g. , Tenn. Code Ann. § 4- 49-102(24) (defining “pari-mutuel betting” to mean “a type of bet in which all wagers on a particular occurrence are pooled and winnings are paid in accordance with the size of the pool and the number of winners.”). 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). Further, even if sports betting requires a “house” (it does not), Kalshi’s subsidiary, “Kalshi Trading,” sets bet prices, holds the opposite side to its customers on trades, and effectively acts as the “house.” See Pl. Br. Supp. Prelim. Inj. Ex 3 at 3, KalshiEX LLC v. Schuler , No. 2:25-cv-1165-SDM-CMV (S.D. Ohio Oct. 7, 2025), Dkt. No. 11-3.
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NSH 3426338.2
Case 3:26-cv-00034 Document 40-1 Filed 01/23/26 Page 5 of 22 PageID #: 442
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