Case 3:25-cv-02016-VDO Document 56-1 Filed 01/16/26 Page 15 of 29
First, Kalshi’s sports-event contracts are not dependent on the occurrence , nonoccurrence, or extent of the occurrence of a sports event—i.e., whether the sports event occurs—but rather on the outcome of the sports event (or parts thereof)—i.e., which team wins or who scores a touchdown. In three recent decisions, the Nevada District Court held that sports bets are not swaps for precisely this reason. Crypto.com , 2025 WL 2916151, at *1, 7–9; Hendrick , 2025 WL 3286282, at *3; Robinhood Derivatives, LLC v. Dreitzer , No. 2:25-cv-1541, 2025 WL 3283308, at *1 (D. Nev. Nov. 25, 2025). Second, there is no “financial, commercial, or economic consequence” associated with Kalshi’s sports-betting contracts. Aside from whether the purchaser of a sports-betting contract wins or loses their bet, Kalshi’s sports-betting contracts have no direct financial consequences for the purchaser. To constitute a swap, the underlying event itself “must be inherently associated with a potential financial consequence.” Hendrick , 2025 WL 3286282, at *7. “[E]xternalities like whether people bet on the event or contingency, or whether the event’s occurrence or nonoccurrence causes downstream financial consequences, are not sufficient.” Id. Sports-betting contracts do not satisfy this requirement and therefore do not qualify as swaps. 2. Congress did not manifest clear intent to repeal IGRA or to make the CFTC the nation’s sole gaming regulator. Congress did not repeal IGRA and grant the CFTC the exclusive authority to regulate nationwide sports betting. In fact, Congress expressed the opposite and went out of its way to prevent event-contract markets from being used as a means to conduct a gambling business. See 156 Cong. Rec. S5906-07 (daily ed. July 15, 2010) (colloquy between Sens. Feinstein and Lincoln). To that end, Congress enacted the “Special Rule” authorizing the CFTC to “determine that such agreements, contracts, or transactions are contrary to the public interest” and to disallow any “gaming” activity on DCMs at all. See 7 U.S.C. § 7a-2(c)(5)(C)(i)–(ii). The CFTC
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