Case: 2:25-cv-01165-SDM-CMV Doc #: 34-1 Filed: 11/14/25 Page: 5 of 22 PAGEID #: 523
Shortly after Congress enacted the Special Rule, the CFTC adopted implementing regulations, whereby it exercised such discretion and explicitly prohibited any event contract that “involves, relates to, or references … gaming, or an activity that is unlawful under any State or Federal law.” 17 C.F.R. § 40.11(a)(1); see also 76 Fed. Reg. 44,776 (July 27, 2011). Thus, in promulgating § 40.11(a)(1), the CFTC made the categorical determination that event contracts involving these specific activities are contrary to the public interest. Kalshi’s sports betting operation rests entirely on an assumption that Kalshi, by self- certifying its gaming activities as legitimate swaps, can preemptively decide that its gaming activities do not violate the CEA, CFTC regulations, IGRA, or other federal statutes. See Pl.’s Mot. Supp. Prelim. Inj., ECF No. 11 at PageID 230. But it is inconceivable that Congress would have granted a private, for-profit entity the power to authorize and conduct nationwide sports betting—including on Indian lands—without explicitly stating as much, especially in the face of comprehensive statutes and regulations governing gaming on Indian lands. 2 It is axiomatic that “Congress … does not alter the fundamental details of a regulatory scheme in vague terms or 2 The prohibition of sports betting in the CFTC regulations is more than sufficient reason for this Court to deny Kalshi’s motion. Being stopped by state authorities from doing something that is also contrary to federal law is not an irreparable injury to Kalshi, and there is no principle of equity that would require this Court to lend its imprimatur to illegal gambling. But Kalshi is wrong on the merits as well. Kalshi’s position would mean that when it amended the CEA in 2010, Congress authorized the nationwide sports betting Kalshi now advertises, displacing IGRA and the prohibitions of sports betting Congress had imposed in the Professional and Amateur Sports Protection Act (“PASPA”), along with preempting all state regulation. Congress, of course, did no such thing. Neither the CEA nor the CFTC’s lengthy explication of swaps in the Federal Register provides any framework for regulating sports betting; the CFTC swaps regulations do not even mention sports, making it implausible to read the 2010 amendment as turning the CFTC into the one-and-only regulator of sports betting. See Crypto.com , 2025 WL 2916151, at *9 (holding that wagering on the outcome of sporting events was the proper subject of an event contract “cannot be a proper reading of the [CEA] because that would mean that all sports wagering must be done on a DCM, and not at casinos, as the CEA forbids nearly all swap dealing and trading unless done on a DCM”).
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