Case 1:25-cv-08846-AT Document 60-1 Filed 12/03/25 Page 16 of 31
serve any real commercial purpose. Rather, they would be used solely for gambling. 156 Cong. Rec. S5906–07 (daily ed. Jul. 15, 2010). The CFTC’s announcement of § 40.11 reinforces its rationale for the blanket prohibition:
[I]ts prohibition of … ”gaming” contracts is consistent with Congress’s intent [for the CEA’s Special Rule] to “prevent gambling through the futures markets” and to “protect the public interest from gaming and other events contracts.”
76 Fed. Reg. at 44,786 (citations omitted). Kalshi’s sports-event contracts involve gaming and therefore 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 Appellee Br. 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. 3. The self-certification provisions of the CEA and CFTC regulations are invalid as applied to Kalshi Kalshi argues that, in the absence of CFTC action, its own self-certification that 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 law and an unconstitutional violation of the private
16
Made with FlippingBook - Online catalogs