Judge Rules Kalshi Sports Contracts Are Not Swaps, Limiting CFTC Jurisdiction

Federal judge determines Kalshi sports contracts fall outside swap definitions, stripping CFTC exclusive authority over 80-90% of platform revenue sources.

Woofun AI reports that U.S. District Judge Vernon D. Oliver denied Kalshi's request for a preliminary injunction, determining that its sports betting contracts do not qualify as swaps under the Commodity Exchange Act. Consequently, the Commodity Futures Trading Commission lacks exclusive jurisdiction over these instruments. The court noted that sports contracts represent 80% to 90% of Kalshi's listings and revenue, yet the CFTC has not reviewed them under special rules. Judge Oliver reasoned that sports outcomes are results of specific events rather than independent occurrences. Coinbase Financial Markets faced a similar ruling after offering Kalshi contracts via its platform in January as a futures commission merchant, with Connecticut authorities issuing no cease-and-desist orders. At the February hearing, Kalshi held an $11 billion valuation and approximately 24,000 users in the state.