US Judge Rules Kalshi Sports Contracts Are Not Swaps, CFTC Lacks Exclusive Jurisdiction

Judge Vernon D. Oliver of the U.S. District Court for the District of Connecticut denied Kalshi's request for a preliminary injunction and, in the same decision, ruled that the platform's sports event contracts are not swaps under the Commodity Exchange Act. The CFTC did not gain exclusive jurisdiction over those contracts as a result. According to the opinion, sports event contracts account for between 80% and 90% of Kalshi's listed contracts and revenue. The CFTC had never examined any of those contracts under the special rules at issue. Oliver wrote that the outcome of a sports event is an event result, not an independent event. Coinbase Financial Markets lost on the same basis. It offered Kalshi contracts through its platform in January, acting as a futures commission merchant instead of a designated contract market. Connecticut had not previously issued a cease-and-desist order against the company. At a February hearing, Kalshi was valued at roughly $11 billion and counted about 24,000 users in the state. Bitcoin.com News reported the ruling.