Case: 2:25-cv-01165-SDM-CMV Doc #: 34-1 Filed: 11/14/25 Page: 10 of 22 PAGEID #: 528
76 Fed. Reg. at 44,786 (citations omitted). Kalshi’s sports-event contracts involve both gaming and are unlawful activity under federal law. As such, they expressly violate § 40.11(a)(1) and fall outside the scope of the CFTC’s exclusive jurisdiction. First, because Kalshi’s sports-event contracts constitute sports betting, they necessarily involve gaming in violation of § 40.11(a)(1). Kalshi even conceded as much in a prior case before the D.C. Circuit. See Brief of Appellee at 17, KalshiEX LLC v. CFTC , No. 24-5205 (D.C. Cir. Nov. 15, 2024), Doc. No. 2085055 (“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 Thus, 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 all sports-event contracts offered on Indian lands. 4. The self-certification provisions of the CEA and CFTC regulations do not grant Kalshi authority to decide that its sports-event contracts are lawful swaps Kalshi argues that, in the absence of CFTC action, Kalshi’s own decision to self-certify its gaming contracts as lawful swaps unilaterally establishes these products are bona fide financial instruments under the CEA, and preempts longstanding federal and state law and regulation to the contrary. This is wrong as a matter of statutory and regulatory law, but even if it were correct, this would be an unconstitutional violation of the private nondelegation doctrine, which guards against precisely the type of unchecked, privately exercised powers that Kalshi relies upon to list and trade its event contracts. While the Supreme Court routinely upholds congressional delegations of power to federal agencies, it pays particular attention when those
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