Case 3:25-cv-02016-VDO Document 56-1 Filed 01/16/26 Page 26 of 29
In contrast, the CEA’s self-certification provisions empower Kalshi—a private, for-profit entity—to oversee its own sports-betting enterprise, yet simultaneously fail to provide any mechanism for advance public comment, mandatory agency oversight, or standards by which the CFTC may implement its discretion. See Farewell Address of Commissioner Kristin N. Johnson, CFTC (Sep. 3, 2025), https://www.cftc.gov/PressRoom/SpeechesTestimony/opajohnson25 ?utm_source=substack&utm_medium=email (warning that the CFTC has “too few guardrails and too little visibility into the prediction market landscape”). Further, even according to Kalshi, its self-certification is not merely advisory. Rather, it has the force of law and CFTC inaction is sufficient to trigger preemption. Pl. Memo. Supp. Prelim. Inj. at 20, ECF No. 30-1 “The result of this regulatory scheme is that [Kalshi] can, without any [CFTC] review of its decision on the merits, effectively decide” to engage in sports betting free from tribal and state regulation. See Alpine Sec. Corp. v. Fin. Indus. Regul. Auth ., 121 F.4th 1314, 1328 (D.C. Cir. 2024). Consequently, construing the CEA to attribute legal effect on state law via Kalshi’s self-certification would be unconstitutional—a construction that must be avoided. See United States v. Martinez , 525 F.3d 211, 215–16 (2d Cir. 2008) (“Under the doctrine [of constitutional avoidance], when a court is confronted with two plausible constructions of a statute, one of which ‘would raise a multitude of constitutional problems,’ that court must adopt the construction that avoids the constitutional issue.” (quoting Clark v. Martinez , 543 U.S. 371, 380 (2005))). Moreover, Kalshi has a financial interest in self-certifying its sports-betting contracts, regardless of such certifications’ verity. And Kalshi’s financial interests in offering lucrative and unregulated nationwide sports betting are directly adverse to the sovereign and economic interests of the Mashantucket Pequot Tribe, Mohegan Tribe of Indians, State of Connecticut, and
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