Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 16 of 28 PageID: 16
43. Event contracts are transactions in a type of intangible commodity that the CEA calls an “excluded commodity.” See United States v. Wilkinson , 986 F.3d 740, 745 (7th Cir. 2021) (reviewing “excluded commodities” under the CEA). An “excluded commodity” includes “an occurrence, extent of an occurrence, or contingency (other than [certain exceptions]) that is (I) beyond the control of the parties to the relevant contract, agreement, or transaction; and (II) associated with a financial, commercial, or economic consequence.” 7 U.S.C. § 1a(19)(iv). 44. This is precisely what the event contracts traded on Kalshi’s exchange are. Sports-related event contracts are within these statutory definitions of swaps and transactions in excluded commodities because: (i) they are binary contracts that pay out depending on the occurrence or non-occurrence of a future event that is beyond the control of the parties to the contract; and (ii) the underlying sporting events they concern have economic consequence. See KalshiEx , 2025 WL 1218313, at *2, *6; KalshiEx (D. Nev.) , 2025 WL 1073495, at *5 n.3. 45. With respect to the latter requirement, wins and losses in sporting events have obvious, significant financial consequences for the players, the teams, the owners or schools they represent, their communities, the television networks that cover the matches, and other stakeholders. These economic consequences include, among many other things, increased revenue from ticket sales, sponsorships and TV viewership for winning teams, and boosts in economic activity for cities where playoff games occur. 46. The CEA expressly grants the CFTC “exclusive jurisdiction” over all “transactions involving swaps or contracts of sale of a commodity for future delivery” that are “traded or executed on a contract market designated” by the CFTC. 7 U.S.C. § 2(a)(1)(A). The CEA also includes a separate provision entitled “Special rule for review and approval of event
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