Case 2:25-cv-01541-APG-DJA Document 32 Filed 09/30/25 Page 6 of 21
However, in 2010, Congress amended the CEA, in part, to allow for “event contracts” through the
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“Special Rule.” See 7 U.S.C. § 7a-2(c)(5)(C). Recognizing the slippery slope of event contracts,
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Congress specifically authorized the CFTC to prohibit certain types of event contracts, including
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those that involve gaming and other activity that is unlawful under federal or state law. Id.
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Shortly after Congress enacted the Special Rule, the CFTC adopted implementing
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regulations, whereby it exercised such discretion and explicitly prohibited the listing and trading of
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any event contract that “involves, relates to, or references … gaming, or an activity that is unlawful
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under any State or Federal law.” 17 C.F.R. § 40.11(a)(1); see also 76 Fed. Reg. 44,776 (July 27,
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2011). Thus, in promulgating § 40.11(a)(1), the CFTC made the categorical determination that
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event contracts involving these specific activities are contrary to the public interest. 5 Robinhood’s sports betting operation rests entirely on an assumption that Kalshi, upon
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whose exchange Robinhood trades its sports event contracts, has the preemptive authority to self-
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certify that its gaming activities do not violate the CEA, CFTC regulations, IGRA, or other federal
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statutes. But it is inconceivable that Congress would have granted a private, for-profit entity the
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authority to conduct nationwide sports betting—including on Indian lands—without explicitly
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stating as much, especially in the face of comprehensive statutes and regulations governing gaming
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on Indian lands. It is axiomatic that “Congress … does not alter the fundamental details of a
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regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide
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elephants in mouseholes.” Whitman v. Am. Trucking Ass’ns , 531 U.S. 457, 468 (2001).
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Ignoring this history and longstanding principles of federal statutory interpretation,
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Robinhood now presents an alternate reality—one in which a statutory scheme whose scope is
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limited to addressing the risk, discovery, and dissemination of commodity pricing information, see
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7 U.S.C. § 5(a)–(b)—exclusively governs nationwide sports betting, including that which occurs
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5 When announcing its rule, the CFTC clarified:
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[I]ts prohibition of … “gaming” contracts is consistent with Congress’s intent [for the CEA’s Special Rule] to “prevent gambling through the futures markets” and to “protect the public interest from gaming and other events contracts.”
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76 Fed. Reg. at 44,786 (citations omitted).
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