Case: 25-7516, 01/30/2026, DktEntry: 49.2, Page 22 of 41
overlap here is due only to Kalshi’s backdoor attempt to evade comprehensive gaming regulations. 7
7 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 Pl.-Appellant Br. at 40–45, ECF No. 20.1. 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 constitutes a “swap.” Kalshi argues that such determination is exclusively up to the CFTC and would only be judicially reviewable pursuant to an Administrative Procedures Act challenge. Pl.-Appellant Br. at 44, ECF No. 20.1; see also Pl.’s Resp. in Opp. to Emergency Mot. to Dissolve Prelim. Inj. at 7, Hendrick , No. 2:25-cv-00575 (Oct. 31, 2025), ECF No. 183. But, as the lower court properly held,
Concluding that a defense to Kalshi's preemption argument must be brought solely through the APA puts the cart before the horse. To decide if something falls within the CFTC's jurisdiction to potentially preempt state law, courts must interpret the CEA because the CEA specifically defines that jurisdiction. Additionally, Congress, through the CEA, defined what is a swap, and nothing in the CEA gives the CFTC the exclusive power to interpret the statutory language defining words like “swap.”
1-ER-10.
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