with the defendant’s use of “inherent,” which, it correctly points out, is not in the definition. (Doc. No. 41 at 8.) Rather, Kalshi argues, its contracts meet the CEA’s lenient requirement that swaps be associated with potential financial consequences. ( Id. ) The court pressed plaintiff’s counsel on this very issue during the preliminary injunction hearing. ( See Doc. No. 47, Tr. 14–17.) In response to the court’s question regarding what possible financial consequence results from, for example, whether a particular player makes a three-pointer in the second half, plaintiff’s counsel made two convincing points. First, aside from how many games a team wins during a season, individual player performance, and how a team performs, can have financial consequences, even if not right away. Second, the statute uses the term potential financial, economic, or commercial consequence. Congress could have imposed a more stringent requirement. Or it could have omitted a qualifier altogether. Congress chose to use “potential,” which is broad. Accord Oral Argument at 3:44–3:53, KalshiEX LLC v. Flaherty , No. 25-1922 (3d Cir. Sept. 10, 2025), ECF No. 80 (Chagares, C.J.: “Well it’s not only that, it’s associated with a potential financial, economic or commercial consequence. I mean that’s that’s – that’s pretty broad.” (emphasis in original locution)), https://www2.ca3.uscourts.gov/oralargument/audio/25- 1922KalshiexLLCv.MaryJoFlahertyetal.mp3 [perma: https://perma.cc/8YTV-Q8TW]. Moreover, Kalshi alleges that its contracts concern “financially significant events.” (Doc. No. 1 ¶ 26.) And plaintiff’s counsel represented that an office within Kalshi screens contracts to determine whether they are associated with a potential financial consequence. ( See Doc. No. 47, Tr. 74.) In response to the court’s request for an example of a contract that Kalshi would not offer, for lack of a potential financial consequence, plaintiff’s counsel responded that it would not offer a contract on, for example, “what is the color of a Gatorade shower going to be[?]” ( Id. 74–75.)
17
Case 3:26-cv-00034 Document 48 Filed 02/19/26 Page 17 of 25 PageID #: 885
Made with FlippingBook - Online catalogs