Case: 3:25-cv-00698 Document #: 1 Filed: 08/20/25 Page 20 of 47
enumerated in the special rule: gaming and unlawful activity. KalshiEX LLC , 2024 WL 4164694, at *5. As a result, the CFTC found that Kalshi’s congressional control contracts were contrary to the public interest. KalshiEX LLC , 2024 WL 4164694, at *6; CFTC Order (September 22, 2023) 4 ; Release Number 8780-23, CFTC Disapproves KalshiEX LLC’s Congressional Control Contracts (September 22, 2023). 5 73. On November 1, 2023, Kalshi initiated litigation against the CFTC, challenging the CFTC determination, inter alia , that Kalshi’s congressional control contracts were contrary to the public interest because the contracts involve gaming. 74. In the KalshiEX LLC litigation, Kalshi argued its election contracts do not involve gaming because an event contract involves gaming “if it is contingent on a game or game-related event” such as “the Kentucky Derby, Super Bowl, or Masters golf tournament.” 75. In the KalshiEX LLC litigation, the Court acknowledged the potential application of the IGRA in supplying a definition of “gaming” as codified in, but not defined by, the CEA and implementing regulations. KalshiEX LLC , 2024 WL 4164694, at *9 (“And while the CFTC’s order also considered and pulled definitions from a federal statute, it did not look to the only one that the Court is aware actually uses the term ‘gaming’—the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2701.”). 76. June 10, 2024, the CFTC proposed rule-amendments to 17 C.F.R. Part 40, to “specify types of event contracts that fall within the scope of CEA section 5c(c)(5)(C) and are contrary to the public interest.” Event Contracts, 89 Fed. Reg. 48968-01, *48969. The proposed rule-amendments repeatedly acknowledge the CFTC’s limited resources. “From a resource allocation perspective, this [rule-
4 https://www.cftc.gov/sites/default/files/filings/documents/2023/orgkexkalshiordersig230922.pdf. 5 https://www.cftc.gov/PressRoom/PressReleases/8780-23.
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