Case 2:25-cv-01541-APG-DJA Document 32 Filed 09/30/25 Page 11 of 21
7 U.S.C. § 1a(47)(A)(ii). Similarly, an “excluded commodity” means, among other things, “an
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occurrence, extent of an occurrence, or contingency … that is—(I) beyond the control of the
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parties to the relevant contract, agreement, or transaction; and (II) associated with a financial,
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commercial, or economic consequence.” Id. § 1a(19)(iv).
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Robinhood’s sports event contracts do not meet these definitions because they are not
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dependent on the occurrence or nonoccurrence of a sports event—i.e., whether the sports event
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occurs 10 —but rather on the outcome of the sports event—i.e., which team wins. 11 And although the parties to such contracts presumably have no direct control over which team wins, the contracts
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fail the second requirement because any “financial, commercial, or economic consequence” that
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may potentially be associated with Robinhood’s sports event contracts are related to the outcome of
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the games, not the occurrence or nonoccurrence of the games. Robinhood’s sports event contracts
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are not hedging opportunities for interested parties to supplement the risk of a cancelled sporting
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event; instead, they are merely speculative wagers on the outcome of that sporting event or parts
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thereof. They are, therefore, not dependent upon, or otherwise related to, any potential “financial,
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commercial, or economic consequence.”
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Moreover, the other provisions within the definitions of “swap” and “excluded commodity”
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provide further insight into Congress’s intention when adding the terms to the CEA. See 7 U.S.C.
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§§ 1a(19)(i)–(iii), 1a(47)(A)(i), (iii)–(vi). Specifically, under the canon of noscitur a sociis , the
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potential “financial, economic, or commercial consequence[s]” required under the definition of
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“swap” or “excluded commodity” must relate to rates, currencies, commodities, securities,
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10 An example of what could arguably be a valid “sports event contract” would be: If bad weather is threatening to cause the cancellation of a football game, the owner of the stadium could purchase an event contract that the team will not play their game. This would allow the stadium owner to hedge against the loss of revenue in the event the football game does not occur. This type of contract is not dependent on the outcome of the game, but rather on the occurrence or nonoccurrence of the game. 11 Ostensibly, Robinhood presumes that the act of a particular team winning a sports game is the “event” underlying its sports event contracts—not so. The “events” at the heart of valid sports event contracts are the sports games themselves.
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