First, because Kalshi’s sports event contracts constitute sports betting, they necessarily involve gaming in violation of § 40.11(a)(1). In fact, Kalshi’s own position before the D.C. Circuit confirms the categorical determination the CFTC made under § 40.11(a)(1) regarding “gaming” extends to Kalshi’s sports event contracts: An event contract . . . involves “gaming” if it is contingent on a game or a game- related event—like the Kentucky Derby, Super Bowl, or Masters golf tournament , all of which were mentioned in the provision’s only legislative history. Br. of Appellee, KalshiEX LLC v. CFTC , No. 24-5205, Doc. No. 2085055 at 31 (D.C. Cir. Nov. 15, 2024) (emphasis added). 6 Kalshi’s sports event contracts, thus, involve “gaming.” Additionally, Kalshi’s sports events contracts also violate various federal and state laws. Kalshi allows participants to purchase its sports event contracts—and therefore engage in mobile sports betting—throughout the United States, including on Indian lands. Kalshi’s sports event contracts do not meet any of the requirements for gaming on Indian lands under IGRA. See 25 U.S.C. § 2710(d)(1). Kalshi’s sports event contracts therefore involve activity that is unlawful under federal law 7 and are not lawful transactions under the exclusive jurisdiction of the CFTC. 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 Kalshi presumes to offer its sports event contracts as “swaps” that are based on “excluded commodities.” However, Kalshi’s sports event contracts do not qualify as “swaps” or swaps 6 Although it did not directly rule on the legality of sports event contracts, the U.S. District Court for the District of Columbia effectively adopted Kalshi’s definition of “gaming” under the CEA. See KalshiEX LLC v. CFTC , No. 1:23-cv-03257 (JMC), 2024 WL 4164694, *12 (D.D.C. Sept. 12, 2024). 7 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.
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