Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 48 of 110
Kalshi has argued, for example, that whether two people will hug has suffi-
cient potential economic consequences. 2-StateSER-100; see 1-StateSER-
46-55, 2-StateSER-80-88, 2-StateSER-108-320 (providing other examples).
Indeed, Kalshi’s counsel said he could not conceive of any happening that
would not have sufficient potential economic consequences to be the basis of
a “swap.” 1-StateSER-70-71. 3
As the district court explained, every event “might have some conceiv-
able financial consequence if one is creative enough.” 1-ER-13. For exam-
ple, a bet on which team wins a youth softball game could qualify as a
“swap” under Kalshi’s view because the winning team might eat a celebra-
tory dinner at its favorite restaurant. If those attenuated consequences
were sufficient, then every event would be “associated with” potential eco-
nomic consequences, and the potential-consequence requirement would
“lose all meaning.” 1-ER-19-20.
b. Kalshi’s interpretation of “swaps” makes no sense in context The surrounding statutory text confirms that Kalshi’s contracts are
not “swaps.” 1-ER-14-15.
3 Kalshi argues (Br. 51) that weather swaps involve only downstream con- sequences. Even if true, Section 1a(47)(A)(iii) expressly includes “weather swap,” 7 U.S.C. § 1a(47)(A)(iii)(XVII)—so Section 1a(47)(A)(ii) is not re- quired to cover weather swaps.
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