Case: 25-1922 Document: 83 Page: 7
Date Filed: 09/24/2025
Page 6
1 it inserted the word swap into the Commodities Exchange Act in
2 2010 as part of the Dodd-Frank reforms. The reason this is
3 such a massive sea change is because swaps have to be traded on
4 CFTC regulated exchanges on a designated contract market, and
5 it's, in fact, a federal crime to trade them outside of those
6 scenarios, and so what we have here is a definition by Kalshi
7 that would essentially make all casinos and sportsbooks
8 currently federal felons. We think that's certainly not what
9 Congress was trying to do. We don't think that's what the
10 Supreme Court in Murphy was envisioning when they struck down
11 PASPA and said, we're leaving this for the states to regulate.
12 They didn't mean we're leaving it to the CFTC, and that was
13 only seven years ago. They expected this to be something that
14 the states regulate, and I think what the -- part of the issue
15 here --
16
JUDGE CHAGARES: Let's jump into this now.
17
MR. EHRLICH: Uh-huh.
18
JUDGE CHAGARES: We're -- because we don't have all
19 that much time. So I -- it seems that that the definition of
20 swaps is actually quite broad, and I understand you point out
21 some things that seem undesirable to your side, but I mean, for
22 instance, I noticed in your brief, you -- I don't know if
23 there's a suggestion on a limitation, but you suggest something
24 should be inherently financial, economic, whatever, but that's
25 not in the statute. Are we obliged to, to apply what the
Veritext Legal Solutions 215-241-1000 ~ 610-434-8588 ~ 302-571-0510 ~ 202-803-8830
Made with FlippingBook - Online catalogs