Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 40 of 110
A. Kalshi’s Sports and Election Contracts Are Not “Swaps,” “Option[s],” or “Contracts of Sale of a Commodity for Fu- ture Delivery” Under the CEA 1. The CFTC Does Not Have “Exclusive Jurisdiction” Over Any Contract Traded on a DCM Kalshi’s threshold argument—that any contract traded on a DCM is
subject to the CFTC’s exclusive jurisdiction—is wrong. Kalshi repeatedly
asserts that the CEA “grants the CFTC ‘exclusive jurisdiction’ over trading
on DCMs”—meaning that if a contract is traded on a DCM, only the CFTC
may regulate it. Kalshi Br. 1, 4, 6-7, 22, 26-35. According to Kalshi, “[t]he
CEA preempts regulation of trading on DCMs—full stop.” Id. at 40; see
Paradigm Amicus Br. 21 (“[I]f it’s traded on a CFTC-exchange, it’s exempt
from state regulation.”).
But that is not what the statute says. Section 2(a)(1)(A) gives the CEA
“exclusive jurisdiction” over “swap[s],” “option[s],” “contracts of sale of a
commodity for future delivery,” and other listed derivatives that are “traded
or executed on [a DCM],” or “any other” market. 7 U.S.C. § 2(a)(1)(A). To
apply, a contract must both qualify as one of the listed derivatives and be
traded on a DCM or other market. If a contract is not one of those deriva-
tives, Section 2(a)(1)(A) does not apply, and the claim of preemption fails at
the outset.
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