KalshiEX LLC v. Matthew Schuler -Southern District of Ohio at Columbus
Split Score
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Case Summary
Disposition
Affirmed in Part
The Sixth Circuit addressed whether KalshiEX’s sports-event contracts, traded on its federally registered designated contract market, qualify as “swaps” under the Commodity Exchange Act (CEA) and therefore place the contracts exclusively under the Commodity Futures Trading Commission’s jurisdiction, pre-empting Ohio and Tennessee sports-gambling laws. The court held that the contracts do not meet the statutory definition of a swap and, even if they did, the CEA neither expressly nor impliedly pre-empts the two States’ gambling regimes; it therefore affirmed the Ohio district court’s refusal to enjoin state enforcement, vacated the Tennessee district court’s contrary injunction, and remanded both cases.
Circuit Split Identified
Legal Issue
Whether sports-event contracts offered on federally regulated designated contract markets are “swaps” under 7 U.S.C. §1a(47) such that the CEA grants the CFTC exclusive jurisdiction and pre-empts state sports-gambling laws.
Circuit Positions
Sports-event contracts are swaps; CEA expressly/implicitly pre-empts state gambling laws.
Sports-event contracts are not swaps; CEA does not pre-empt state gambling laws.
Conflict Summary
The Third Circuit concluded that sports-event contracts are swaps and that the CEA’s exclusive-jurisdiction clause and Special Rule conflict-pre-empt state gambling regulation, whereas the Ninth and Sixth Circuits have held that such contracts are not swaps and that the CEA leaves room for, and does not pre-empt, state gambling laws governing sports wagering.