Case 2:25-cv-00978-APG-BNW Document 75 Filed 09/15/25 Page 8 of 20
The CEA’s savings clause therefore expressly reserves the authority of the NIGC and
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Tribal gaming authorities over gaming on Indian lands, in accordance with IGRA.
2)
The CFTC expressly prohibits Crypto.com’s sports event contracts
Crypto.com’s sports event contracts are categorically prohibited by the CFTC as contrary to
the public interest. See 17 C.F.R. § 40.11(a)(1). Crypto.com is not authorized to offer such
contracts under the CEA and its sports event contracts are therefore invalid and fall beyond the
scope of the CFTC’s “exclusive” jurisdiction.
The Special Rule grants the CFTC discretion to determine whether event contracts are
“contrary to the public interest” if they involve gaming or unlawful activity under federal or state
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law. 7 U.S.C. § 7a-2(c)(5)(C)(i). When the CFTC makes such a determination, the CEA expressly
prohibits those contracts. Id. § 7a-2(c)(5)(C)(ii). Here, the CFTC made such a determination when
it promulgated 17 C.F.R. § 40.11(a)(1), wherein it categorically prohibited event contracts that
“involve[], relate[] to, or reference[] … gaming, or an activity that is unlawful under any State or
Federal law.” 5 The CFTC acted consistently with Congress’s intent that the Special Rule prevent the usage
of event contracts “to enable gambling,” particularly sports betting. In fact, as Senator Lincoln—
one of the principal architects of the Special Rule—explained:
[It] is our intent … [that the Special Rule] prevent derivatives contracts that are contrary to the public interest because they exist predominantly to enable gambling through supposed “event contracts.” It would be quite easy to construct an “event contract” around sporting events such as the Super Bowl, the Kentucky Derby, and Masters Golf Tournament. These types of contracts would not serve any real commercial purpose. Rather, they would be used solely for gambling.
5 Crypto.com believes that the CFTC regulations entail a two-step process, whereby the event contract must first involve one of the prohibited activities under § 40.11(a)(1) and then the CFTC must separately conduct a 90-day review under § 40.11(c) to determine whether the contract is contrary to the public interest. See ECF No. 42 at 10–11, 13. Not so. Instead, § 40.11(a)(1) imposes a categorical prohibition on event contracts involving gaming or unlawful activity. There is no two-step review process needed because the CFTC has already determined that such event contracts are contrary to the public interest.
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