Case 1:25-cv-01283-ABA Document 26 Filed 05/09/25 Page 27 of 36
B y Kalshi’s own admission, its gaming devices are prohibited from DCM listing under the plain
language of Regulation 40.11(a)(1) because they are contracts involved with gaming.
Kalshi and the District Courts of New Jersey and Nevada ignore the blanket prohibition in
Regulation 40.11(a)(1) and instead focus only on the existence of the Special Rule authorizing the
CFTC’s review. See Hendrick , 2025 WL 1073495, at *6 (D. Nev. Apr. 9, 2025) (noting that
Kalshi’s gaming devices would only “subject Kalshi to the special rule that allows the CFTC to
conduct a public interest review”); Flaherty. et al., 2025 WL 1218313, at *5 (D. N. J. April 28,
2025). This argument ignores that the CFTC has already undertaken a review pursuant to the
Special Rule and categorically prohibited gaming contracts under Regulation 40.11(a)(1).
Because gaming contracts are prohibited under Regulation 40.11(a)(1) on registered
entities (including DCMs), they cannot fall within the CFTC’s exclusive jurisdiction. A
prerequisite for exclusive jurisdiction is that the contract is offered on a regulated entity, including
DCMs. Since gaming contracts are prohibited from being offered on these entities, such contracts
cannot possibly fall within the CFTC’s exclusive jurisdiction.
Regulation 40.11(a)(1) is consistent with other federal and Maryland laws in prohibiting
Kalshi’s gaming devices. As previously noted, the Wire Act criminalizes businesses e ngaged in
“betting or wagering” that “use[] a wire communication facility” to transmit “bets or wagers or
information assisting the in the placing of bets or wagers on any sporting event or contest” where
such operations are illegal under state law. 18 U.S.C. § 1084(a)-(b); see supra at §I.A(2)(b)(i).
Similarly, IGRA prohibits sports gambling unless the relevant Tribe and State where the tribal land
is located both authorize sports gaming pursuant to a “Tribal -State compa ct.” See 25 U.S.C. §
2703(8); 25 C.F.R. § 502.4(c); 25 U.S.C. § 2710(d)(1); see also supra at §I.A(2)(b)(i). Finally,
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