Case: 3:25-cv-00698 Document #: 1 Filed: 08/20/25 Page 22 of 47
took the form of a binary “yes/no” event contract that posed the question: “Will <team> win <title>?” 81. When self-certifying, Kalshi did not mention the prohibited contracts enumerated in 7 U.S.C. § 7a-2(c)(5)(C) or that, as a registered entity, Kalshi is prohibited from listing contracts that involve gaming pursuant to 17 C.F.R. § 40.11. The self-certification merely states that it is CEA compliant. 8 82. On February 5, 2025, the CTFC announced its intent to hold a public roundtable related to sports-related event contracts. The purpose of the roundtable was to “establish a holistic regulatory framework that will both foster thriving prediction markets and protect retail customers from binary options fraud such as deceptive and abusive marketing and sales practices.” 9 The roundtable was to include topics such as: “CFTC-registered entities’ legal arguments in court that event contracts based on games or sports contests or sporting events constitute ‘gaming’ and are therefore prohibited under the Commodity Exchange Act,” as well as “other issues including but not limited to Constitutional questions such as the Commerce Clause, States’ rights and State regulatory schemes, Federalism, Federal preemption doctrines, and Tribal sovereignty as well as other federal laws applicable to sports betting.” Release Number 9046-25, CFTC Announces Prediction Markets Roundtable (February 5, 2025). 10 The roundtable was then subsequently cancelled without explanation. Dustin Gouker, News: CFTC Cancels Prediction Markets Roundtable , Event Horizon (April 24, 2025). 11 83. On February 7, 2025, 12 Kalshi filed a self-certification to trade sports event contracts, which allowed buyers to predict the winner of a sport event title related to American sports leagues, and took the form of a binary, “yes/no” event
8 https://www.cftc.gov/sites/default/files/filings/ptc/25/01/ptc01222514045.pdf. 9 https://www.cftc.gov/PressRoom/PressReleases/9046-25 10 https://www.cftc.gov/PressRoom/PressReleases/9046-25. 11 https://nexteventhorizon.substack.com/p/news-cftc-cancels-prediction-markets. 12 This is the same day former Chairman Behnam exited the CFTC.
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