Case 1:25-cv-01283-ABA Document 26 Filed 05/09/25 Page 25 of 36
the first time. See ECF No. 2 at 12-14. But the 1974 Act was concerned with commodity futures
and did not use the term “swap.” T he fact that the 1974 “Act’s proponents were concerned that
the states … might step in to regulate the futures markets themselves” has no bearing on the
meaning of the term “swaps” because Congress did not give the CFTC “exclusive jurisdiction”
over transactions involving “swaps” until Dodd -Frank in 2010. Am. Agric. Movement, Inc. v. Bd.
of Trade of City of Chicago , 977 F.2d 1147, 1156 (7th Cir. 1992).
In enacting Dodd-Frank, Congress did not want investors’ funds tied up in “gambling”
contracts that “served no commercial purpose at all.” 156 Cong. Rec. S5902, S5906-7 (daily ed.
July 15, 2010) (Sen. Feinstein) (expressing concern about “derivative contract[s]” being “used
predominantly by speculators or participants not having a commercial or hedging intere st”) . There
is no evidence in the legislative history that anyone in Congress intended for the addition of
“swaps” to the CFTC’s jurisdiction t o displace States’ or Tribes’ authority over traditional forms
of gambling or override state gambling laws nationwide.
Dodd-Frank ’s “swap” definition was intended to cover transactions in the heartland of the
CFTC’s authority, like swaps pertaining to a farmer’s crop yield or changes in corporate asset
purchases. See Concept Release on the Appropriate Regulatory Treatment of Event Contracts, 73
Fed. Reg. 25,671 (May 7, 2008). The transactions relating to Kalshi’s gaming devices, however,
concern to the offer, purchase, and sale of wagers on the outcomes of sporting events and are not
associated with a “potential financial, economic, or commercial consequence.”
7 U.S.C. §
1a(47)(A)(ii); see supra at §I.A(2)(a). Dodd- Frank’s legislative history demonstrates that
Congress, anticipated just such a contingency: “It would be quite easy to construct an ‘event
contract’ around sporting events ; ” it then made clear that “[t]hese types of contracts would not
serve any real commercial p urpose,” but instead “would be used solely for gambling.” 156 Cong.
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