Case: 25-7516, 01/30/2026, DktEntry: 49.2, Page 14 of 41
§ 5(a)–(b), effectively repealed core provisions of IGRA. See Pl.-Appellant Br. at 27–28, ECF No. 20.1 (“Kalshi’s sports and election contracts are traded on a [Designated Contract Market (‘DCM’)], which necessarily denies jurisdiction to other regulators.” (internal quotation marks omitted)). Under this theory, Congress silently stripped away tribes’ and states’ longstanding authority over sports betting 4 (and potentially other kinds of class III gaming) while allowing for-profit companies like Kalshi to run internet casinos pursuant to their own private oversight. What’s more, if sports-betting contracts are “swaps” subject to the exclusive jurisdiction of the CFTC, as Kalshi maintains, then all off-market sports betting— 4 Kalshi also suggests that its sports-event contracts are not gaming because there is no betting against the “house.” Pl.-Appellant Br. at 19, ECF No. 20.1. Not so. A “house” is not a necessary element of gaming. For example, pari-mutuel wagering—a type of betting system where all bets or wagers are pooled and players bet against each other rather than a “house”—is considered gaming. See, e.g. , NRS § 464.005(8) (“Pari-mutuel system of wagering means any system whereby wagers with respect to the outcome of a race, sporting event or other event are placed in a wagering pool conducted by a person licensed or otherwise permitted to do so under state law, and in which the participants are wagering with each other and not against that person.”). Additionally, IGRA regulations define class II gaming to include, among other things, nonbanking card games that are necessarily played without a “house.” 25 C.F.R. § 502.3(c). Further, even if sports betting requires a “house” (it does not), Kalshi’s subsidiary, “Kalshi Trading,” sets bet prices, holds the opposite side to its customers on trades, and effectively acts as the “house.” See Pl. Br. Supp. Prelim. Inj. Ex 3 at 3, KalshiEX LLC v. Schuler , No. 2:25-cv-1165-SDM-CMV (S.D. Ohio Oct. 7, 2025), Dkt. No. 11-3.
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