Case 2:26-cv-00151 Document 1 Filed 02/23/26 PageID.14 Page 14 of 27
CFTC’s exclusive jurisdiction. That is because, as both courts and the CFTC have recognized, sporting events can have significant economic consequences for a broad ecosystem of stakeholders. Orgel , 2026 WL 474869, at *7–10; Flaherty , 2025 WL 1218313, at *6; CFTC Amicus Br. at 19-20. Advertisers, sponsors, television networks, local communities, sportsbooks, and others all stand to gain or lose substantial sums depending on the outcomes of sports events. Sports event contracts thus offer these entities opportunities to hedge their exposure. And that is happening in the market right now. 41. Take, for example, Game Point Capital, a sports-focused insurance firm that works with college athletic departments, pro teams, and sponsors to insure risk related to performance bonuses, coach salary buyouts, postseason and ticket revenue, and other areas of economic exposure. 13 Game Point Capital uses Kalshi to hedge, and it intends to do so for $30 million in risk annually. 14 42. Likewise, Underdog Sports, a fantasy sports company, uses Kalshi as a tool to “hedge against volatility” on its own platform. 15 And others can as well: sponsors of a particular team or athlete can use event contracts to hedge against the risk that the team or athlete underperforms. Hotel operators can hedge against the revenue earned from a local team making a playoff run, and TV networks can hedge against the risk that star players who draw viewers may not play in certain games. 13 Game Point Capital, Services , https://www.gamepointcapital.com/services; see also Paul Steinbach, UConn Insured Basketball Coach Bonuses and Saved Nearly $3M , Athletic Bus. (Apr. 23, 2024) https://www.athleticbusiness.com/operations/budgeting/article/15669200/uconn-insured-basketball- coach-bonuses-and-saved-nearly-3m (Game Point Capital wrote insurance contract that saved university nearly $3 million in bonus payments to coaches related to NCAA tournament performance.) 14 Andrew Ross Sorkin, et al., New Epstein Details Rattle Washington, Hollywood and Beyond , N.Y. Times (Feb. 10, 2026), https://www.nytimes.com/2026/02/10/business/dealbook/epstein-lutnick-wasserman- starmer.html. 15 See Brett Smiley, Underdog Sports Preparing To Use Kalshi, Prediction Markets For Its Own Risk Management , InGame (Oct. 20, 2025), https://www.ingame.com/underdog-kalshi-pm-risk-management/.
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