Case: 25-1922 Document: 73 Page: 10 Date Filed: 08/14/2025
v. Lopez , 514 U.S. 549, 565 (1995), proving that almost any transaction tied to an event would be a swap under Kalshi’s view of the Commodity Exchange Act. See Appellants’ Br. 18–19. The absurdity of that position is compounded by the Act’s structure. That structure funnels swaps to CFTC-regulated markets by making it generally unlawful to enter into any swap outside those markets. Appel- lants’ Br. 16–17. So any “swap”—including, in Kalshi’s view, sports bets and classic casino games— must be traded on a CFTC-regulated ex- change. 1 Appellants’ Br. 18. This torpedoes Kalshi’s argument (at 43) that other state and federal gambling laws have “full effect in the vast majority of applications” outside of designated contract markets; under Kalshi’s interpretation, no gambling could take place outside of those markets. 2 Although the company eventually admits as much, its only re- 1 As discussed below, the Act does not “expressly preserve[] state regulation of off-DCM transactions,” Appellee Br. 40, because that provi- sion does not apply to swaps, see infra 11–12. 2 Kalshi cannot (at 42–43) avoid the consequences of its interpreta- tion by retroactively importing the definition of “bet or wager” from the Unlawful Internet Gaming Enforcement Act of 2006 into other decades- old federal gambling statutes from other Congresses. Many of those stat- utes do not use “bet or wager” at all. See, e.g. , 18 U.S.C. § 1955 (“gam- bling”); 15 U.S.C. § 1172 (“gambling device”). And unlike the 2006 statute, none of those other laws contain an exclusion for Act-related transactions. Kalshi’s own cited case rejected the same argument it makes here. Erlenbaugh v. United States , 409 U.S. 239, 245–47 (1972)
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