U.S.C. § 2710(d)(1). Kalshi’s sports event contracts therefore involve activity that is unlawful under federal law—IGRA. 6 For these reasons, Kalshi’s sports event contracts are not lawful transactions under the exclusive jurisdiction of the CFTC. Therefore, the CEA does not preempt or otherwise conflict with IGRA, and IGRA governs Kalshi’s sports event contracts. 2. Kalshi’s sports event contracts do not qualify as “swaps” or swaps based on “excluded commodities,” and are therefore not subject to the CFTC’s exclusive jurisdiction Second, Kalshi’s sports event contracts do not qualify as “swaps” or swaps based on “excluded commodities,” and therefore are not under the CFTC’s exclusive jurisdiction. Kalshi presumes to offer its sports event contracts as “swaps” that are based on “excluded commodities.” Under the CEA, a “swap” is defined as: [A]ny agreement, contract, or transaction . . . that provides for any purchase, sale, payment, or delivery (other than a dividend on an equity security) that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence.
6 In addition to IGRA, Kalshi’s sports event contracts also violate other federal laws including the Wire Act, 18 U.S.C. § 1084, and UIGEA, 31 U.S.C. § 5361 et seq. , as well as state gaming laws because they amount to unlicensed, unregulated sports bets.
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