Case 1:25-cv-12578-RGS Document 41-1 Filed 10/16/25 Page 9 of 24
7 U.S.C. § 1a(47)(A)(ii). Similarly, an “excluded commodity” means, among other things, “an occurrence, extent of an occurrence, or contingency … that is—(I) beyond the control of the parties to the relevant contract, agreement, or transaction; and (II) associated with a financial, commercial, or economic consequence.” Id. § 1a(19)(iv). Robinhood’s sports event contracts do not meet these definitions at least because they are not dependent on the occurrence or nonoccurrence of a sports event—i.e., whether the sports event occurs 6 —but rather on the outcome of the sports event—i.e., which team wins. 7 In fact, the U.S. District Court of the District of Nevada recently held that similar sports event contracts offered by Crypto.com were not “swaps” for, partially, this very reason. See Order, North American Derivatives Exchange, LLC v. Dreitzer , No. 2:25-cv-01541 (Oct. 14, 2025) (distinguishing between an “occurrence, nonoccurrence, or the extent of an occurrence” and “outcome,” explaining that “Crypto’s live presentation industry event contracts are not swaps because, as Crypto self-certified to the CFTC, these contracts turn on the outcome of the live event, not on the ‘occurrence, nonoccurrence, or the extent of the occurrence’ of a live event”). Further, although the parties to such contracts presumably have no direct control over which team wins, the contracts fail the second requirement because any “financial, commercial, or economic consequence” that may potentially be associated with Robinhood’s sports event 6 An example of what could arguably be a valid “sports event contract” would be: If bad weather is threatening to cause the cancellation of a football game, the owner of the stadium could purchase an event contract that the team will not play their game. This would allow the stadium owner to hedge against the loss of revenue in the event the football game does not occur. This type of contract is not dependent on the outcome of the game, but rather on the occurrence or nonoccurrence of the game. 7 Ostensibly, Robinhood presumes that the act of a particular team winning a sports game is the “event” underlying its sports event contracts—not so. The “events” at the heart of valid sports event contracts are the sports games themselves. 9
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