Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 19 of 110
INTRODUCTION KalshiEX LLC (Kalshi) advertises its products as “legal sports betting
in all 50 states.” But it does not comply with the gaming laws in Nevada or
any other State.
Instead, Kalshi argues that it can be regulated only by the Commodity
Futures Trading Commission (CFTC). That is wrong. The CFTC is respon-
sible for regulating trading in commodity futures, not gambling. Nothing
in the Commodity Exchange Act (CEA) shows that Congress intended to
take away the States’ and Indian Tribes’ historic powers to regulate gam-
bling and give them all to the CFTC. Indeed, Kalshi’s products are not even
within the CFTC’s jurisdiction, so Kalshi’s preemption argument fails at the
outset.
The implications of Kalshi’s position are truly staggering. Under
Kalshi’s view of the CEA, all sports wagers are “swaps” that can be regu-
lated only by the CFTC. In Kalshi’s retelling, when Congress amended the
CEA in response to the financial crisis, it both legalized sports betting na-
tionwide and made the CFTC the Nation’s sole gaming regulator. And then
no one noticed for over a decade—not even the Supreme Court, which reaf-
firmed the States’ historic power to regulate sports betting in Murphy v.
NCAA , 584 U.S. 453 (2018). Congress does not “hide elephants in mouse-
holes.” Whitman v. Am. Trucking Ass’ns , 531 U.S. 457, 468 (2001). It did
1
Made with FlippingBook - Online catalogs