Case: 25-7516, 01/30/2026, DktEntry: 49.2, Page 20 of 41
Second, there is no “financial, commercial, or economic consequence” associated with Kalshi’s sports-betting contracts. Aside from whether the purchaser of a sports-betting contracts wins or loses their bet, Kalshi’s sports- betting contracts have no direct financial consequences for the purchaser. To constitute a swap, the lower court properly held that the underlying event itself “must be inherently associated with a potential financial consequence.” 1-ER-15. “[E]xternalities like whether people bet on the event or the contingency, or whether the event’s occurrence or nonoccurrence causes downstream financial consequences, are not sufficient.” 1-ER-14. Sports-betting contracts do not satisfy this requirement and therefore do not qualify as swaps. 2. Congress did not manifest clear intent to repeal IGRA or to make the CFTC the nation’s sole gaming regulator. Congress did not repeal IGRA and grant the CFTC the exclusive authority to regulate nationwide sports betting. In fact, Congress expressed the opposite intent and went out of its way to prevent event-contract markets from being used as a means to conduct a gambling business. See 156 Cong. Rec. S5906-07 (daily ed. Jul. 15, 2010) (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)–
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