USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 27 of 97
a financial, commercial, or economic consequence.” 7 U.S.C. § 1a(19)(iv). Under the CEA, such events are one type of “excluded commodit y. ” See id. § 1a(19). Transactions on DCMs in excluded commodities, as with other commodities, fall within the CFTC’s exclusive jurisdiction. Id. § 2(a)(1)(A).
Following Congress’s expansion of commodities to include events,
instruments known as “ event contracts ” gained prominence. Event contracts
identify multiple possible outcomes, a payment schedule for those outcomes,
and an expiration date. The contract ’s value is determined by market forces,
which means its price fluctuates from the time of its creation to its expiration
according to changing perceptions about the likelihood the event will occur.
In 2008, the CFTC solicited public comment regarding “ the appropriate
regulatory treatment of ” such “ event contracts ,” which the agency explained
may be based on “varied” eventualities such as “ the results of political elections, or the outcome of particular entertainment events. ” Concept Release , 73 Fed. Reg. 25,669, 25,669-25,670 (May 7, 2008). It explained that the CEA “supersedes and preempts other laws , including state and local
gaming … laws, with respect to transactions executed on ” DCMs and sought
comments on “ the implications of possibly preempting state gaming laws with respect to event contracts .” Id. at 25,673.
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