USCA4 Appeal: 25-1892
Doc: 44
Filed: 12/22/2025
Pg: 26 of 39
with a potential financial consequence.” Hendrick , 2025 WL 3286282, at *7. “[E]xternalities like whether people bet on the event or contingency, or whether the event’s occurrence or nonoccurrence causes downstream financial consequences, are not sufficient.” Id. Sports-betting contracts do not satisfy this requirement and therefore do not qualify as swaps. Id. at *9. 2. Congress did not manifest clear intent to repeal IGRA or to make the CFTC a gaming regulator. Further, rather than manifest an intent to repeal IGRA and grant the CFTC the exclusive authority to regulate nationwide sports betting, Congress expressed the opposite and went out of its way to prevent contracts markets from being exploited by those seeking to use them for sports gambling, even in the context of sports mega-events that might have significant economic consequences, such as the Super Bowl, the Kentucky Derby, or the Masters golf tournament. 156 Cong. Rec. S5906-07 (colloquy between Sens. Feinstein and Lincoln). To that end, Congress enacted the “Special Rule” authorizing the CFTC to “determine that such agreements, contracts, or transactions are contrary to the public interest and to disallow any “gaming” activity on DCMs at all. See 7 U.S.C. § 7a-2(c)(5)(C)(i)– (ii). The CFTC acted consistently with Congress’s intent by promulgating the blanket prohibition of event contracts involving gaming. 17 C.F.R. § 40.11(a)(1). The CFTC explained that its “prohibition of certain ‘gaming’ contracts is
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