Case 1:25-cv-01283-ABA Document 26 Filed 05/09/25 Page 32 of 36
The CEA and Regulation 40.11 complement state gaming laws by reserving to the states
the ability to regulate gaming contracts that cannot be lawfully listed on a DCM. If Kalshi’s
gaming devices are not permitted on DCMs, Kalshi cannot self-certify them into the CFTC’s
“exclusive jurisdiction” to evade state gaming laws; Kalshi cannot break federal law to claim a
preemption for the purpose of evading state law.
II. A NY H ARM K ALSHI M AY S UFFER AS A R ESULT OF THE C EASE AND D ESIST L ETTER W AS OF I TS O WN M AKING .
Kalshi’s self-certification of its gaming devices in blatant disregard of Regulation
40 .11(a)(1)’s clear and unambiguous prohibitions and in violation of the Wire Act is sufficient
grounds for this Court to dismiss Kalshi’s request for injunctive relief . It is axiomatic that, when
seeking the equitable relief of a preliminary injunction, a plaintiff must approach the Court with
“clean hands.” Smith v. Cessna Aircraft Co. , 124 F.R.D. 103, 105 (D. Md. 1989) ( “He who comes
into equity must come with clean hands” ); Age of Majority Educ. Corp. v. Preller , 512 F.2d 1241,
1244 (4th Cir. 1975) (plaintiffs barred from obtaining injunctive relief due to unclean hands).
Here, with knowledge and forethought, Kalshi certified its gaming devices as compliant with
CTFC regulations, despite the plain language of Regulation 40.11(a)(1) and the prohibitions under
the Wire Act. To the contrary, any alleged irreparable harm accruing to Kalshi from the
Commission’s Cease and Desist letter is the result of Kalshi’s own bad acts and not entitled to
equitable relief from this Court.
Kalshi knew that its gaming devices were contracts that involved gaming. It advertised its
gaming devices as “sports betting” and specifically marketed the ability of individuals to wager on
March Madness in states where sports wagering was otherwise prohibited. Exhibit 2, at 3, 6, 8.
In its Motion, Kalshi states that its gaming devices “allow [ed] users to place positions on” which
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