Case 1:25-cv-12578-RGS Document 41-1 Filed 10/16/25 Page 7 of 24
[It] is our intent … [that the Special Rule] prevent derivatives contracts that are contrary to the public interest because they exist predominantly to enable gambling through supposed “event contracts.” It would be quite easy to construct an “event contract” around sporting events such as the Super Bowl, the Kentucky Derby, and Masters Golf Tournament. These types of contracts would not serve any real commercial purpose. Rather, they would be used solely for gambling.
156 Cong. Rec. S5906–7 (daily ed. July 15, 2010). 4 Robinhood’s sports event contracts involve both gaming and unlawful activity under state and federal law. As such, they expressly violate 17 C.F.R. § 40.11(a)(1) and fall outside the scope of the CFTC’s exclusive jurisdiction. Because Robinhood’s sports event contracts constitute sports betting, they necessarily involve gaming in violation of § 40.11(a)(1). See Br. of Appellee at 17, KalshiEX LLC v. CFTC , No. 24-5205 (D.C. Cir. Nov. 15, 2024), Doc. No. 2085055 (“An event contract … involves ‘gaming’ if it is contingent on a game or a game-related event—like the Kentucky Derby, Super Bowl, or Masters golf tournament , all of which were mentioned in the provision’s only legislative history.” (emphasis added)). For the same reason, Robinhood’s sports event contracts also violate various federal and state laws (as evidenced by the impetus for this litigation). Robinhood allows users as young as 18 years old to purchase its sports event contracts anywhere nationwide, including on Indian lands. The purchase and sale of these sports event contracts amount to speculative sports wagers, which constitutes gaming activity. Robinhood’s sports 4 In an amicus brief filed in the Third Circuit, Senator Lincoln effectively re-affirmed this position, stating: “Congress intended for the CFTC to use the special rule to guard against gambling on the exchanges. And it contemplated that sports contracts would fall within this regulatory sweep .” Br. of Amici Curiae Former Members of Cong. in Supp. of Pl.-Appellee at 29, KalshiEX, LLC v. Flaherty , No. 25-1922 (3d Cir. July 31, 2025), ECF No. 66 (emphasis added). 7
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