USCA4 Appeal: 25-1892
Doc: 44
Filed: 12/22/2025
Pg: 27 of 39
consistent with Congress’s intent to ‘prevent gambling through the futures markets’ and to ‘protect the public interest from gaming and other events contracts.’” 76 Fed. Reg. 44776, 44786 (Jul. 27, 2011). As it recognized, the Special Rule reinforced Congress’s existing policy against sports betting. Kalshi even acknowledged before the D.C. Circuit that sports betting involves “gaming” and runs afoul of the categorical prohibition. See Brief of Appellee at 17, 43, 54, KalshiEX LLC v. CFTC , No. 24-5205 (D.C. Cir. Nov. 15, 2024). The Special Rule and the CFTC’s regulations undermine any claim that Congress intended to repeal IGRA and legalize sports betting in 2010. That the CEA and IGRA only overlap here is due to Kalshi’s backdoor attempt to evade comprehensive gaming regulations. 10 10 Under Kalshi’s theory, simply calling a sports wager a “swap”—regardless of whether it is actually a valid “swap”—and listing it for trade on a DCM automatically grants the CFTC exclusive jurisdiction, to the detriment of all other regulatory authorities. See Appellant Br. at 25–26, 28, ECF No. 16. What, then, would prevent Kalshi from calling “contracts” on other traditional forms of gaming, like roulette and lotteries, “swaps” and subjecting them to the exclusive jurisdiction of the CFTC? According to Kalshi, CFTC inaction—despite banning “gaming” contracts via 17 C.F.R. § 40.11(a)(1)—is all that is required to bless contracts blatantly designed for no other purpose than to enable gambling. Kalshi’s theory would likewise strip this Court of its own jurisdiction to interpret what, under the terms of the CEA, constitutes a “swap.” Kalshi has argued that determination is exclusively up to the CFTC and would only be judicially reviewable pursuant to an Administrative Procedures Act challenge. See Pl.’s
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