2:25-cv-575-APG-BNW MOTION HEARING - ROUGH DRAFT - DO NOT CITE!!!
21 same as what the CFTC is trying to do, when you look at the scheme as a whole, the threat of criminal penalties, the threat of massive civil liability, the -- you know, all of the respects in which what they are requiring Kalshi to do would imperil Kalshi's Federal regulatory authority. All of that shows that there is an actual conflict here. THE COURT: All right. Let me back up again factually and make sure I understand how your client operates. Kalshi is a facilitator. It's the platform, the -- well, it creates the markets, but let's say it's the platform that hosts these various markets for contracts. So it creates, I'm presuming -- it creates the question or the contract that someone is then going to buy or sell, correct? So Kalshi says, we're going to create the question "Who's going to qualify for the Final 4?" That's a Kalshi-created question that, in a sense, sits on the platform, and then buyers and sellers come in and out of that? MR. HAVEMANN: That is correct. THE COURT: Who sets the initial price? The first person who comes in and says, I'll buy that for a dollar? Or somebody says, I'll sell that for a dollar? Or does Kalshi set the initial price? MR. HAVEMANN: Kalshi does not set the initial price, and I don't know -- with respect to the initial price, I would want to confer with Mr. Heaslip, but I suspect that there
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UNITED STATES DISTRICT COURT Judy K. Moore, RMR, CRR
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