Case 1:25-cv-08846-AT Document 60-1 Filed 12/03/25 Page 22 of 31
CFTC acted consistently with Congress’s intent by promulgating the blanket prohibition of event contracts involving gaming and illicit activities, see 17 C.F.R. § 40.11(a)(1). This point is emphasized by the fact that the CEA and IGRA only overlap here due to Kalshi’s backdoor attempt to evade comprehensive gaming regulations. 10 Further, Kalshi cannot meet the “heavy burden” of proving Congress intended to repeal IGRA because there is a reasonable interpretation of the CEA that gives full effect to both statutes: the CFTC’s exclusive jurisdiction does not extend to Kalshi’s sports bets. See Epic Sys. Corp. , 584 U.S. at 510. Instead, compliance with both statutory regimes is entirely possible, and nothing within IGRA’s restraints on class III gaming on Indian lands obstructs or invalidates the provisions of the CEA. Kalshi can still allow users located on Indian lands to trade on permissible event contracts under the CEA, such as the future prices of commodities like wheat or corn. It can even engage in class III gaming on Indian lands, including sports betting, so long as it is in compliance with IGRA. 10 Further, under Kalshi’s theory, simply calling a sports wager a “swap”—regardless of whether it is actually a valid “swap”—and listing it for trade on a DCM automatically grants the CFTC exclusive jurisdiction, to the detriment of all other regulatory authorities. See Pl. Mot. for Prelim. Inj. at 11, 14–15 (ECF No. 16). What, then, would prevent Kalshi from calling “contracts” on other traditional forms of gaming—such as roulette and lotteries—“swaps” and subjecting them to the exclusive jurisdiction of the CFTC? According to Kalshi, CFTC inaction—despite the CFTC categorically banning “gaming” contracts via 17 C.F.R. § 40.11(a)—is all that is required to bless contracts blatantly designed for no other purpose than to enable gambling. Kalshi’s theory would likewise strip this Court of its own jurisdiction to interpret the law and determine what, under the terms of the CEA, constitutes a “swap.” As Kalshi has argued, that determination is exclusively up to the CFTC and would only be reviewable pursuant to an Administrative Procedures Act challenge against the CFTC. See Pl.’s Resp. in Opp. to Emergency Mot. to Dissolve Prelim. Inj. at 7, Hendrick , No. 2:25-cv-00575 (Oct. 31, 2025), ECF No. 183. But, as the Nevada District Court recently held, “the CEA does not expressly delegate to the CFTC the exclusive power to decide what is a swap … [and] [n]othing in the CEA takes statutory interpretation away from courts.” Crypto.com , 2025 WL 2916151, at *6; see also Hendrick , 2025 WL 3286282, at *5.
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