Case 1:25-cv-02152-ESK-MJS Document 15 Filed 04/18/25 Page 18 of 51 PageID: 139
to review the submission. Id. § 7a-2(c)(2). As relevant to the event contracts here, the CFTC must take final action on whether to prohibit such contracts within “90 days from the commencement of its review.” Id. § 7a-2(c)(5)(C)(iv). The CEA also contains a “[s]pecial rule for review and approval of event contracts,” which provides: The CFTC “may determine” that “agreements, con- tracts, transactions, or swaps in excluded commodities that are based upon the occurrence, extent of an occurrence, or contingency … , by a designated contract market … are contrary to the public interest” and therefore prohibited if “the agreements, contracts, or transactions involve,” among other things, “gaming” or “activity that is unlawful under any Federal or State law.” Id. § 7a-2(c)(5)(C); see 17 C.F.R. § 40.11(a)(1). The definition of an “excluded commodity” (like the definition of “swap”) includes “an occurrence, extent of an occurrence, or con- tingency ... that is (I) beyond the control of the parties to the relevant contract, agreement, or transaction; and (II) associated with a financial, commercial, or economic consequence.” 7 U.S.C. § 1a(19)(iv). C. Kalshi’s Business And This Case. Kalshi is certified by the CFTC as a designated contract market and oper- ates a derivatives exchange and prediction market where users can buy and sell derivatives contracts known as “event contracts.” ECF No. 1 (Compl.) ¶¶ 12, 37. The event contracts identify a future event and propose a binary yes/no ques- tion regarding whether that future event will occur. Id. ¶ 20. Event contracts are traded on an exchange, and traders exchange positions with other traders in the marketplace. Id. ¶ 21. A trader may purchase either the “yes” or “no” position
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