Kalshi’s revisionist history cannot withstand even the slightest scrutiny. As the Nevada District Court aptly stated, “[i]t is absurd to think that Congress intended for DCMs to turn into nationwide gambling venues on every topic under the sun to the exclusion of state regulation and with no comparable federal regulator without ever mentioning that was the goal when Congress added swaps to the CEA in 2010.” Hendrick , 2025 WL 3286282, at *9 (footnote omitted). III. Kalshi’s Preemption Argument Would Violate the Private Nondelegation Doctrine. Kalshi’s preemption argument turns on the extraordinary claim that Congress delegated the power to preempt state law to an interested private party simply by self-certifying its own sports- betting contracts and listing them on its exchange. The private non-delegation doctrine, however, guards against precisely the type of unchecked, privately exercised powers upon which Kalshi relies. See Carter v. Carter Coal Co. , 298 U.S. 238, 311 (1936). While the Supreme Court upholds congressional delegations of power to federal agencies with an intelligible principle, it applies a different standard when those delegations are to private entities. “[A] law … violates the private nondelegation doctrine when it allows non-government entities to govern.” FCC v. Consumers’ Rsch. , 606 U.S. 656, 697 (2025). Recently the Supreme Court found that the permissibility of a private delegation depends on whether the agency retains oversight and ultimate decision-making authority over the private entity’s actions. Id. at 693. There, the Court upheld the delegation to a private entity, but only because it merely played “an advisory role” and the final decision-making authority rested with the agency. Id. In contrast, the CEA’s self-certification provisions empower Kalshi—a private, for-profit entity—to oversee its own sports-betting enterprise, yet simultaneously fail to provide any mechanism for advance public comment, mandatory agency oversight, or standards by which the CFTC may implement its discretion. See Farewell Address of Commissioner Kristin N. Johnson,
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Case 3:26-cv-00034 Document 40-1 Filed 01/23/26 Page 19 of 22 PageID #: 456
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