Case 1:25-cv-02152-ESK-MJS Document 15 Filed 04/18/25 Page 25 of 51 PageID: 146
transactions involving swaps or contracts of sale of a commodity for future de- livery” that are “traded or executed on a contract market designated” by the CFTC “or any other board of trade, exchange, or market.” Id. Kalshi claims this provision gives the CFTC exclusive jurisdiction over its event contracts because they are “swaps,” id. § 1a(47)(A)(ii), and Kalshi is a CFTC-designated contract market. PI Br. 5–6, 14. And, Kalshi argues, Congress’s grant of exclusive juris- diction to the CFTC to regulate event contracts means Congress intended to preempt the field of all state laws that affect event contracts. PI Br. 14–18. This theory suffers from various flaws. To begin, the exclusive-jurisdiction provision does not even cover the transactions at issue. Kalshi’s theory hinges on the idea that event contracts are “swaps” within the exclusive jurisdiction of the CFTC. PI Br. 5–6. But a “swap” is limited to “any agreement, contract, or transaction” that “provides for any purchase, sale, payment, or delivery” that “is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or com- mercial consequence .” 7 U.S.C. § 1a(47)(A)(ii) (emphasis added). This definition was meant to cover run-of-the-mill transactions in the heartland of the CFTC’s authority, like swaps pertaining to a specific 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). Yet the transactions here concern event contracts related to sports games, which are not associated with a “potential financial, economic, or commercial consequence.” 7 U.S.C. § 1a(47)(A)(ii). Kalshi doesn’t seem to think so either.
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