Case 3:25-cv-02016-VDO Document 56-1 Filed 01/16/26 Page 17 of 29
Furthermore, only Kalshi (an interested private company), not Congress or the CFTC, claims that the CEA’s definition of “swap” displaces tribal, state, and federal regulation of sports betting. The text and legislative history of the 2010 CEA amendments, as well as subsequent CFTC actions, confirm that the CFTC was not established to regulate sports betting, let alone assume the role of the nation’s sole sports-betting regulator. Ultimately, Kalshi’s attempt to foist authority onto the CFTC (which the CFTC does not claim for itself) indicates that Kalshi is wrong about the meaning of “swap.” See Event Contracts, 89 Fed. Reg. 48968, 48982–83 (Jun. 10, 2024) (“The [CFTC] is not a gaming regulator … and the [CFTC] does not believe that it has the statutory mandate nor specialized experience appropriate to oversee [gambling], or that Congress intended for the [CFTC] to exercise its jurisdiction or expend its resources in this manner.”). The CFTC’s own actions confirm that it has not asserted authority to regulate sports betting. In a recent advisory letter, the CFTC clarified it has not “taken any official action to approve the listing for trading of sports-related event contracts on any DCM.” CTFC Staff Letter No. 25-36 at 2 n.4 (Sep. 30, 2025). In this advisory letter, the CFTC noted that “at least one Agreement, § 8. If Kalshi’s theory were correct, then it could easily move beyond just sports betting into other traditional forms of gaming and further impact tribes, like the Connecticut Tribes, that offer online gaming. But, according to Kalshi, CFTC inaction—despite banning “gaming” contracts via 17 C.F.R. § 40.11(a)(1)—is all that is required to bless contracts blatantly designed for no other purpose than to enable gambling. Kalshi’s theory would likewise strip this Court of its own jurisdiction to interpret what constitutes a “swap.” Kalshi has argued that determination is exclusively up to the CFTC and would only be judicially reviewable pursuant to an Administrative Procedures Act challenge. See Pl.’s Resp. in Opp. to Emergency Mot. to Dissolve Prelim. Inj. at 7, Hendrick , No. 2:25-cv- 00575 (Oct. 31, 2025), ECF No. 183. “But the CEA does not expressly delegate to the CFTC the exclusive power to decide what is a swap … [and] [n]othing in the CEA takes statutory interpretation away from courts.” Crypto.com , 2025 WL 2916151, at *6.
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