Case 3:25-cv-02121-VDO Document 58-1 Filed 01/16/26 Page 11 of 29
allowing for-profit companies like Coinbase to run internet casinos pursuant to their own private regulations. What’s more, if sports-betting contracts are “swaps” subject to the exclusive jurisdiction of the CFTC, as Coinbase maintains, then all off-market sports betting—including sports betting conducted by the Connecticut Tribes and other tribes under IGRA—is prohibited by the CEA. See KalshiEX, LLC v. Hendrick , No. 2:25-cv-575, 2025 WL 3286282, at *1 (D. Nev. Nov. 24, 2025), appeal filed , No. 25-7516 (9th Cir.). With one inapplicable exception, the CEA prohibits off-market swaps. See 7 U.S.C. § 2(e). Consequently, if all sports-betting contracts are swaps, “then all sports betting must be done on a [Designated Contract Market (‘DCM’)].” N. Am. Derivatives Exch., Inc. v. Nevada Gaming Control Bd. ( Crypto.com ), No. 2:25-CV-00978, 2025 WL 2916151, at *9 (D. Nev. Oct. 14, 2025), appeal filed , No. 25-7187 (9th Cir.). Coinbase’s argument thus does double violence. On one hand, by permitting Coinbase to offer sports betting on tribal land, its argument sweeps aside Congress’s recognition that “Indian tribes have the exclusive right to regulate gaming activity on Indian lands.” 25 U.S.C. § 2701(5). On the other, it also prohibits tribes from offering sports betting that IGRA plainly authorizes. See 25 C.F.R. § 502.4(c). Moreover, if Coinbase’s position is adopted, the reach of this definition would extend beyond sports betting to encompass other forms of gaming because Coinbase’s preemption argument depends on embracing an interpretation of “swap” that has “no limiting principle.” Hendrick , 2025 WL 3286282, at *6; see Crypto.com , 2025 WL 2916151, at *9. Coinbase’s
II gaming to include, among other things, nonbanking card games, which necessarily are played without a “house.” 25 C.F.R. § 502.3(c).
11
Made with FlippingBook - Online catalogs