Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 53 of 110
of “Swap,” 77 Fed. Reg. 48208-01, 48212, 48246-50 (Aug. 13, 2012); see 17
C.F.R. § 1.3. The CFTC explained that those contracts historically were
regulated by States, and that there was no indication that Congress “in-
tended” for those contracts “to be regulated as swaps.” 77 Fed. Reg. at 48212
& n.29; see id. at 48246.
That reasoning applies equally to sports bets. See 1-ER-14-17. Sports
bets do “not involve risk-shifting arrangements with financial entities”—the
hallmark of a swap. 77 Fed. Reg. at 48248. They are consumer transactions
that people enter into “primarily for personal [entertainment] purposes”
and that “historically have not been considered to involve swaps.” Id. at
48246-47. Like insurance and mortgages, sports bets historically have been
regulated by the States. Murphy , 584 U.S. 484. There is no indication that
Congress intended for them to be regulated as “swaps.” 1-ER-16.
3. Kalshi’s Contracts Are Not “Option[s]” or “Con- tracts of Sale of a Commodity for Future Delivery” Kalshi contends (Br. 46-47) that even if its contracts are not “swaps,”
they are “option[s]” or “contracts . . . for future delivery” of a type of “com-
modity” (an “excluded commodity”) under Section 2(a)(1)(A). That made-
for-litigation position, which Kalshi barely developed below, see 1-ER-21
n.8, is wrong.
As an initial matter, Kalshi should be estopped from making this ar-
gument, because it told the CFTC that all of its contracts are “swaps.” When
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