Case: 25-1922 Document: 73 Page: 13 Date Filed: 08/14/2025
tory “swap” definition. All of those subclauses pertain to financial instru- ments or measures. 5 See Appellants’ Br. 23; 7 U.S.C. § 1a(47). To the ex- tent Kalshi is correct (at 39) that Congress meant to “cast[] a wide net in defining” swaps, it did so through a different subclause, which captures any transaction “that is, or in the future becomes, commonly known to the trade as a swap.” 7 U.S.C. § 1a(47)(A)(iv). And because transactions based on some events (like the price of Super Bowl tickets) might qualify as “swaps” and involve “gaming,” the special rule will still come into play even under a proper interpretation of “swap.” So the special rule does not, as Kalshi contends (at 37), “confirm[]” that “the swap definition includes a sports event”; it exists to address transactions “involv[ing]” certain cat- egories, including “gaming.” 7 U.S.C. § 7a-2(c)(5)(C)(i). Kalshi’s contracts—based on the outcome of athletic events—do not qualify as swaps. This Court can reverse on that basis alone. II. The Act Does Not Preempt New Jersey’s Gambling Laws. Even assuming Kalshi is offering “swaps,” its preemption theories fail. Gambling has long been regulated by the States and is at the core of 5 While Kalshi cites (at 38–39) “[e]xclusions” from the definition of “swap” as evidence that “additional exemptions ‘are not to be implied,’” that “canon of construction is not applicable where, as here, the issue is not whether to create an implied exception to a general [definition], but the scope of the general [definition] itself,” Catskill Mountains Chapter of Trout Unlimited, Inc. v. EPA , 846 F.3d 492, 516 (2d Cir. 2017). Because the scope of “swap” does not reach Kalshi’s sports bets, there would be no reason to include them in any list of exceptions.
7
Made with FlippingBook - Online catalogs