Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 42 of 110
nonoccurrence, or the extent of the occurrence” of “an event or contingency”
that is “associated with a potential financial, economic, or commercial con-
sequence.” Id. § 1a(47)(A)(ii).
As the district court explained, Kalshi’s interpretation of “swap” is
contrary to the statutory text, makes no sense in context, “goes against con-
gressional intent” and the CFTC’s guidance, and ignores longstanding fed-
eralism principles. 1-ER-12-21.
a. Kalshi’s interpretation is contrary to the stat- utory text Kalshi’s contracts do not come within the plain text of the “swaps”
definition for two reasons: they depend on the outcomes of events, not the
“event[s]” themselves, and the outcomes of sports events are not “associated
with” potential economic consequences, meaning consequences businesses
would want to hedge against. These textual limitations ensure that “swaps”
include only financial instruments that businesses use to hedge risk, and
not “contract[s] on anything that happens or could happen.” 1-ER-13-14.
Events vs. outcomes. The “swap” definition requires that payment
“depend[] on” whether “an event or contingency” occurs. 7 U.S.C.
§ 1a(47)(A)(ii).
The definition requires an “event or contingency” in order to capture
“significan[t]” occurrences that create risk businesses could want to hedge.
1-ER-12 (internal quotation marks omitted). An “event” is different from
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