Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 58 of 110
does not restrict the authority of state officials; it acts on individuals and
companies, and instructs them that trading in swaps must occur on DCMs.
Id. § 2(e). Nothing in Section 2(a)(1)(A) contradicts that command.
Kalshi also argues (Br. 61-62) that “run-of-the-mill” sports wagers are
not commodity derivatives subject to the CFTC’s jurisdiction because they
are not traded on exchanges. But the CEA’s definition of “swap” does not
require trading, see 7 U.S.C. § 1a(47)(A), and nothing in the CEA requires
options or futures to be traded, either. If only contracts traded on DCMs
could be swaps, options, or futures, then Sections 2(e), 6(a), and 6c(c) would
be nullities; the whole point of those provisions is to require consumer con-
tracts to be traded.
Kalshi cites the CFTC’s rulemaking defining “swap,” but the CFTC
did not set a “bright-line” rule that only traded contracts can be swaps; it
explained that one “factor” to consider in determining whether a contract is
a swap is whether that type of contract historically has been traded, because
that would suggest “risk-shifting arrangements with financial entities.” 77
Fed. Reg. at 48247-50. The CFTC emphasized that contracts entered into
for “personal” purposes are not swaps. Id. Sports bets historically have not
been traded, do not involve risk-shifting, and are entered into for personal
entertainment purposes. 1-ER-16-17.
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