Case 1:25-cv-02152-ESK-MJS Document 15 Filed 04/18/25 Page 27 of 51 PageID: 148
intended. Kalshi’s sports-related event contracts are not “swaps” and therefore do not fall within the CFTC’s “exclusive jurisdiction” in the first place. 3 And where a particular transaction—like Kalshi’s sports-related event contracts—does not fall within the CFTC’s exclusive jurisdiction, the CEA ex- pressly preserves state law: “Except as [provided in the exclusive-jurisdiction provision], nothing contained in this section shall (I) supersede or limit the ju- risdiction at any time conferred … under the laws of … any State, or (II) re- strict … such other authorities from carrying out their duties and responsibilities in accordance with such laws.” 7 U.S.C. § 2(a)(1)(A). As courts have recog- nized, this clause “makes clear that other agencies” still “retain their jurisdiction over all matters beyond the confines of” the exclusive-jurisdiction provision. FTC v. Ken Roberts Co. , 276 F.3d 583, 591 (D.C. Cir. 2001). Even assuming Kalshi’s sports-related event contracts fall under the exclu- sive-jurisdiction provision, neither the purpose nor the text of the CEA shows that Congress intended to regulate so comprehensively in the field of event con- tracts as to leave no room for supplementary state regulation. To start, Kalshi relies primarily on the exclusive-jurisdiction provision for its field preemption claim, but the purpose and text undermine such a theory. 3 Kalshi faces the same problem under the special rule that the CFTC applies to determine whether event contracts are prohibited. 7 U.S.C. § 7a-2(c)(5)(C). The special rule applies to “swaps in excluded commodities” and “excluded com- modities” are again defined as, among other things, “an occurrence, extent of an occurrence, or contingency” that is “associated with a financial, commercial, or economic consequence.” See id. ; id. § 1a(19). Again, athletic events are not of “a financial, commercial, or economic consequence.” Id.
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