Case 1:25-cv-12578-RGS Document 41-1 Filed 10/16/25 Page 12 of 24
advance public comment, requirement of CFTC findings or review, mandatory agency oversight, or standards by which the CFTC may implement its discretion whether to stay a self- certification. Given self-certified contracts may be listed for trading with virtually no review period, see 17 C.F.R. § 40.2(a), and neither Kalshi nor Robinhood is subject to any meaningful government supervision, these provisions are invalid and the CFTC abdicates its final decision- making authority. 10 This point is emphasized by the fact that Robinhood is not self-certifying its own sports event contracts, but rather relying on Kalshi’s certifications as a DCM. Robinhood’s gaming activity is therefore even further removed from government oversight. 11 statute. This interpretation would also have both vast economic and political significance, given Congress’s stated goal of facilitating tribal self-determination through regulated gaming on Indian lands and the fact that the tribal gaming industry generates more than $43 billion each year. See 25 U.S.C. § 2702(1); Press Release, NIGC Announces Record $43.9 Billion in FY2024 Gross Gaming Revenues (July 31, 2025), available at ***********.nigc.gov/nigc- announces-record-43-9-billion-in-fy-2024-gross-gaming- revenues/#:~:text=MILWAUKEE%2C%20WI.%2C%20July%2031,over%20the%20previous% 20fiscal%20year. 10 In her recent Farewell Address, CFTC Commissioner Kristin N. Johnson warned in her remarks that “we have too few guardrails and too little visibility into the prediction market landscape.” Farewell Address of Commissioner Kristin N. Johnson (Sept. 3, 2025), available at ***********.cftc.gov/PressRoom/SpeechesTestimony/opajohnson25?utm_source=substack&ut m_medium=email. 11 In her Farewell remarks, Commissioner Johnson also warned about “rent or buy” licensing schemes that Robinhood and others have implemented:
Finally, the ‘rent or buy’ my license in derivatives markets is booming as prediction markets promise to eclipse crypto markets in volumes of retail customers’ cash captured. The Commission has recently witnessed a number of newly created and legacy firms seeking licenses to offer event contracts. In a number of instances, these businesses approach the Commission seeking licenses to offer traditional products, only to quickly shift once a license is in hand and seek to self-certify prediction market contracts. In other contexts, firms that have received a license quickly auction their newly minted license to others. 12
Made with FlippingBook - Online catalogs