Case: 2:25-cv-01165-SDM-CMV Doc #: 34-1 Filed: 11/14/25 Page: 8 of 22 PAGEID #: 526
“swaps” because they “turn on the outcome of the live event, … not on the ‘ occurrence, nonoccurrence, or the extent of the occurrence ’ of a live event” (emphasis added)). Moreover, any “financial, commercial, or economic consequence” that may potentially be associated with Kalshi’s sports-event contracts is related to the outcome of the games, not the occurrence , nonoccurrence , or extent of the occurrence of the games. 5 Kalshi’s sports-event contracts are not hedging opportunities for interested parties to supplement the risk of a cancelled sporting event; instead, they are merely speculative wagers on the outcome of that sporting event or parts thereof. They are, therefore, not dependent upon, or otherwise related to, any potential “financial, commercial, or economic consequence.” 3. The CFTC expressly prohibits Kalshi’s sports-event contracts Kalshi’s sports bets are not swaps under the CEA’s definition, but even if they were, Kalshi’s sports-event contracts are categorically prohibited by the CFTC as contrary to the public interest. See 17 C.F.R. § 40.11(a)(1). Kalshi is not authorized to offer such contracts under the CEA, and its sports-event contracts are therefore invalid and outside the scope of the CFTC’s “exclusive” jurisdiction. The Special Rule grants the CFTC discretion to determine whether event contracts are “contrary to the public interest” if they involve gaming, unlawful activity under federal or state law, or certain other activities contrary to the public interest, like political assassinations. 7 U.S.C. § 7a-2(c)(5)(C)(i). When the CFTC makes such a determination, the CEA expressly 5 Kalshi does not limit their sports-event contracts to simply who wins a particular sporting event, it also offers what are effectively “prop bets.” See, e.g. , Daniel O’Boyle, Off And Running: Kalshi Lists Its First Player Prop Bets , INGAME (Sept. 4, 2025), https://www.ingame.com/kalshi-lists-player-prop-bets/. Even if this Court believes that, for example, Jared Goff completing a touchdown constitutes an “occurrence,” there is no “financial, commercial, or economic consequence” associated with that particular touchdown.
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