CFTC https://www.cftc.gov/PressRoom/SpeechesTestimony/ opajohnson25?utm_source=substack&utm_medium=email (warning that the CFTC has “too few guardrails and too little visibility into the prediction market landscape”). (Sep. 3, 2025), Further, even according to Kalshi, its self-certification is not merely advisory. Rather, it has the force of law and CFTC inaction is sufficient to trigger preemption. Pl. Memo. Supp. TRO and Prelim. Inj. at 18, Dkt. No. 7. “The result of this regulatory scheme is that [Kalshi] can, without any [CFTC] review of its decision on the merits, effectively decide” to engage in sports betting free from tribal and state regulation. See Alpine Sec. Corp. v. Fin. Indus. Regul. Auth. , 121 F.4th 1314, 1328 (D.C. Cir. 2024). Consequently, construing the CEA to attribute legal effect on state law via Kalshi’s self-certification would be unconstitutional—a construction that must be avoided. See United States v. Martinez , 525 F.3d 211, 215–16 (2d Cir. 2008) (“Under the doctrine [of constitutional avoidance], when a court is confronted with two plausible constructions of a statute, one of which ‘would raise a multitude of constitutional problems,’ that court must adopt the construction that avoids the constitutional issue.” (quoting Clark v. Martinez , 543 U.S. 371, 380 (2005))). Moreover, Kalshi has a financial interest in self-certifying its sports-betting contracts, regardless of such certifications’ verity. And Kalshi’s financial interest in offering lucrative and unregulated nationwide sports betting is directly adverse to the sovereign and economic interests of the State of Tennessee, Amici Tribes, other states, and businesses offering sports betting across the country. The effects of Kalshi’s self-certification go even further; in Kalshi’s view, it can block tribes and states from regulating that which has long been within their sovereign authority to regulate simply by listing sports-betting contracts on its exchange. “This is legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body,
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NSH 3426338.2
Case 3:26-cv-00034 Document 40-1 Filed 01/23/26 Page 20 of 22 PageID #: 457
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