Case: 3:25-cv-00698 Document #: 1 Filed: 08/20/25 Page 17 of 47
low production year in the event of a lack of rain, betting on whether the Bears will win the Super Bowl serves absolutely no hedging or other economic purpose. Indeed, every football fan in Wisconsin understands that such a “contract” lacks economic purpose; rather, such a “contract” is simply a gambling scheme that involves prize, chance, and consideration. Nor does such a “contract” perform any price discovery function on an underlying commodity. It is simply gambling on sports. And it is offered, unabashedly, by Kalshi, to the public, as such, even within states and Indian reservations that strictly prohibit sports betting. 62. In resorting to this legal fiction, Kalshi seeks to blur the distinction between careful minimization and allocation of market risk and what, in reality, amounts to unregulated sports gambling, to such an extent that the preexisting regulatory regime that distinguishes futures from off-exchange betting cannot restrict their business. 63. Such a result runs directly contrary to Congress’s intent in enacting the 2010 amendments to the CEA to specifically give the CFTC the authority to prohibit sports wagering contracts, which — categorically — do not fulfill the economic purposes for which “true” futures contracts are permitted, but regulated: Mrs. FEINSTEIN. I am glad the Senator is restoring this authority to the CFTC. I hope it was the Senator’s intent, as the author of this provision, to define “public interest” broadly so that the CFTC may consider the extent to which a proposed derivative contract would be used predominantly by speculators or participants not having a commercial or hedging interest. Will CFTC have the power to determine that a contract is a gaming contract if the predominant use of the contract is speculative as opposed to a hedging or economic use? Mrs. LINCOLN. That is our intent. The Commission needs the power to, and should, prevent derivatives contracts that are contrary to the public interest because they exist predominantly to enable gambling through supposed “event contracts.” It would be quite easy to construct an “event
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