Not Swaps, and Not Preempted Even If They Were
U.S. District Judge Vernon D. Oliver’s ruling rests on a threshold point rather than preemption: for the CFTC’s exclusive jurisdiction to attach, a contract must be a swap traded on a designated contract market. Oliver held it is the judiciary’s role, not the agency’s, to decide what counts as a swap, rejecting Kalshi’s argument that any such challenge must be brought against the CFTC itself.
On the statute, Oliver read “the occurrence, nonoccurrence, or the extent of the occurrence of an event” to concern whether an event happens and to what degree, not its outcomes. He adopted the reasoning of the District of Nevada in a case brought by a Crypto.com-owned exchange – which found that dictionaries treat “event” as meaning “outcome” only in an archaic sense. A boxing match can occur, not occur, or run three rounds; who wins is an outcome of the event, not a separate event. Oliver expressly declined to decide whether contracts on whether a game reaches overtime or a series reaches a seventh game would fare differently, since neither was in the record.
His second ground was the requirement that the event be associated with a potential financial, economic, or commercial consequence. That connection must be embedded in the event itself, Oliver held, not created by endorsement contracts, bonus provisions, side wagers, or other downstream arrangements made by independent actors. A sporting event has consequences built in through ticket sales, broadcast rights, and advertising; who wins it does not. He also noted Kalshi’s own concession in earlier litigation before the D.C. Circuit that contracts on games are unlikely to serve any commercial or hedging interest.
