Case 3:25-cv-02121-VDO Document 58-1 Filed 01/16/26 Page 26 of 29
While the Supreme Court upholds congressional delegations of power to federal agencies with an intelligible principle, it applies a different standard when those delegations are to private entities. “[A] law … violates the private nondelegation doctrine when it allows non- governmental entities to govern.” FCC v. Consumers’ Rsch ., 606 U.S. 656, 697 (2025). Recently, the Supreme Court found that the permissibility of a private delegation depends upon whether the agency retains oversight and ultimate decision-making authority over the private entity’s actions. Id. at 693. There, the Court upheld the delegation to a private entity, but only because it merely played “an advisory role” and the final decision-making authority rested with the agency. Id. In contrast, the CEA’s self-certification provisions empower Kalshi—a private, for-profit entity upon whose exchange Coinbase offers its sports-betting contracts—to oversee an entire 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 Coinbase, Kalshi’s self-certifications are not merely advisory. Rather, they have the force of law and CFTC inaction is sufficient to trigger preemption. See Pl. Memo. Supp. Prelim. Inj. at 10, ECF No. 5-1. “The result of this regulatory scheme is that [Kalshi, and by effect, Coinbase] 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,
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