7 U.S.C. § 1a(47)(A)(ii). Similarly, an “excluded commodity” means, among other things, “an occurrence, extent of an occurrence, or contingency . . . that is— (I) beyond the control of the parties to the relevant contract, agreement, or transaction; and (II) associated with a financial, commercial, or economic consequence.” Id. § 1a(19)(iv). Kalshi’s sports event contracts do not meet these definitions as they are not dependent on the occurrence or nonoccurrence of a sports event—i.e., whether the sports event occurs 7 —but rather on the outcome of the sports event—i.e., which team wins. 8 Because Kalshi’s sports event contracts are outcome-focused, they are quite simply speculative sports bets. And although the parties to such contracts presumably have no direct control over whether that team wins or loses, the contracts also fail the second requirement, as any “financial, commercial, or economic consequence” that may potentially be associated with Kalshi’s sports 7 An example of what could arguably be a valid “sports event contract” would be: If bad weather is threatening to cause the cancellation of a football game in Buffalo, New York, the owner of Highmark Stadium could purchase an event contract that the Buffalo Bills will not play their Sunday game. This would allow the stadium owner to hedge against the loss of revenue from concessions, souvenirs, or parking in the event the football game does not occur. This type of contract is not dependent on the outcome of the Buffalo Bills’ game, but rather on the occurrence or nonoccurrence of the game. 8 Ostensibly, Kalshi presumes that the act of a particular team winning a sports game is the “event” underlying its sports event contracts—not so. The “events” at the heart of valid sports event contracts are the sports games themselves.
14
Made with FlippingBook - Online catalogs