irony of this result is that the gaming conducted pursuant to tribal-state gaming compacts or state law provides significantly more consumer protection than the unregulated sports betting offered by Kalshi, which allows users as young as 18 years old to engage in practically limitless betting with few, if any, guardrails. 4 Further, if the CEA governs Kalshi’s sports-betting contracts (and potentially other forms of gaming) on Indian lands, then Congress must have intended to repeal other key provisions of IGRA that expressly grant regulatory authority over such activity to tribes, states, the National Indian Gaming Commission (“NIGC”), the Department of the Interior, and the Department of Justice. See 25 U.S.C. §§ 2701(5), 2710(d); 18 U.S.C. § 1166(d). Congress also must have intended to completely override the entire purpose and function of IGRA, which is to recognize tribal sovereignty to conduct and regulate gaming activity that occurs on Indian lands. See 25 U.S.C. § 2701(5). No amount of judicial gymnastics can turn the insertion of the term “swap” in the CEA into such a radical transformation of IGRA. 4 This lack of responsible gaming measures and consumer protections, which are required by legal gaming operations, is dangerous and contrary to the public interest. Josh Sterling (a former CFTC employee and the lawyer representing Kalshi) has dismissed such responsible gaming concerns, stating: “People are adults, and they’re allowed to spend their money however they want it, and if they lose their shirt, that’s on them.” Jessica Welman, Kalshi’s lawyer goes hard at state-regulated gambling , SBCAmericas, (Jul. 11, 2025), https://sbcamericas.com/2025/07/11/kalshi-nclgs- sports-contract-debate/?amp. Additionally, an apparent (and, if true, flagrant) incident of insider trading involving an event contract on Polymarket—one of Kalshi’s sports-betting contract competitors—even prompted a lawmaker to rush forward with legislation to address the CEA’s absence of consumer protections for this type of misconduct. See Alex Keeney, Do prediction markets have an insider trading problem? , Politico (Jan. 6, 2026), https://www.politico.com/ newsletters/politico-nightly/2026/01/06/do-prediction-markets-have-an-insider-trading-problem- 00713365 (Rep. Ritchie Torres announced plans to introduce legislation banning certain government officials from betting on prediction markets following an incident in which a Polymarket user made $400,000 in profit just days after creating an account solely to wager roughly $30,000 on the forced ouster of Venezuelan President Nicolás Maduro).
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NSH 3426338.2
Case 3:26-cv-00034 Document 40-1 Filed 01/23/26 Page 7 of 22 PageID #: 444
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