identical, to a sportsbook. 12 ( See Doc. No. 1 ¶¶ 47–49; Doc. No. 7 at 12–13.) In any event, the defendants do not contest Kalshi’s description of its operations per se , but they contend that the sports event contracts Kalshi offers do not fall under, or do not fall exclusively under, federal regulation. C. Tennessee Sports Wagering Council and its Cease-and-Desist Letter The individual defendants, who are sued in their official capacities only, are Mary Beth Thomas, SWC’s Executive Director; William Orgel, SWC’s Chairman; and Jonathan Skrmetti, Tennessee’s Attorney General. (Doc. No. 1 ¶¶ 20–21, 23.) The SWC is also a defendant. ( Id. ¶ 22.) On January 9, 2026, Thomas, in her capacity as the SWC’s Executive Director—and copying defendants Orgel and Skrmetti, identified in their official capacities—sent Kalshi’s CEO a cease- and-desist letter (“Letter”) (Doc. No. 1-6). The Letter states that Kalshi’s sports event contracts violate the Act, in part because Kalshi is not licensed in Tennessee; it “demands that Kalshi cease offering sports events contracts to customers in Tennessee immediately ,” void any such contracts, and refund deposits; and it threatens fines, civil injunctive relief, and criminal referral. 13 (Doc. No. 1-6 at 3–4 (emphasis in original).) Kalshi filed suit the same day the defendants sent it the Letter. IV. DISCUSSION A. Jurisdiction and the Eleventh Amendment Kalshi brings suit under the Supremacy Clause, U.S. Const. art. 6, cl. 2, and grounds this court’s subject matter jurisdiction in 28 U.S.C. § 1331. (Doc. No. 1 ¶ 16.) The defendants argue that Kalshi lacks a cause of action, that its suit is barred by Tennessee’s sovereign immunity, and 12 Cf. Garland v. Cargill , 602 U.S. 406, 430 (2024) (Sotomayor, J., dissenting) (“When I see a bird that walks like a duck, swims like a duck, and quacks like a duck, I call that bird a duck.”). 13 Under Tennessee law, gambling promotion is a misdemeanor, and aggravated gambling promotion is a felony. (Doc. No. 1-6 at 4 (citing Tenn. Code Ann. §§ 39-17-503, -504).)
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Case 3:26-cv-00034 Document 48 Filed 02/19/26 Page 11 of 25 PageID #: 879
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