Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 59 of 110
Further, even if there were some reason to believe that the CEA would
not require all sports wagers to be traded on DCMs, that would be the prac-
tical effect if Kalshi prevails. If sportsbooks could escape all state regulation
by listing their bets on DCMs, they would have significant financial moti-
vation to do so. See 1-ER-26. Indeed, DraftKings and FanDuel recently
decided to forgo licensing in Nevada to offer sports betting on DCMs in other
States. 1-ER-29. Thus, in practice, the CFTC still would become the Na-
tion’s sole sports-betting regulator.
5. This Court Can Decide the Threshold Issue of Whether the CEA Applies Kalshi argues (Br. 40-45) that federal courts cannot decide in this case
whether its contracts are swaps, futures, or options. Instead, it says, State
Defendants must sue the CFTC under the Administrative Procedure Act
(APA), 5 U.S.C. § 551 et seq. But Kalshi brought this lawsuit and invoked
the CEA to enjoin State Defendants; of course the courts can decide whether
the CEA applies. 1-ER-6-12.
Nothing in the CEA gives the CFTC the sole authority to determine
whether a particular contract is a commodity derivative. 1-ER-9;
Crypto.com , 2025 WL 2916151, at *6. Federal courts have the “duty” to “say
what the law is”—here, by determining whether a particular contract is a
swap, option, or future within the meaning of the CEA. Marbury v. Madi-
son , 5 U.S. (1 Cranch) 137, 177 (1803); see Loper Bright Enters. v. Raimondo ,
41
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