USCA Case #24-5205 Document #2104534 Filed: 03/07/2025 Page 1 of 3
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`150 W. JEFFERSON, SUITE 2100 • DETROIT, MI 48226-4438
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`TELEPHONE: +1313.733.3939 • JONESDAY.COM
`
`Direct Number: +1.313.230.7926
`Arice@jonesday.com
`
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`
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`CM/ECF
`
`March 7, 2025
`
`Mark Langer
`Clerk of Court
`U.S. Court of Appeals for the D.C. Circuit
`333 Constitution Ave., NW
`Washington, DC 20001
`
`Re: KalshiEx LLC v. Commodity Futures Trading Commission (No. 24-5205)
`
`Dear Mr. Langer:
`
`In its haste to spotlight the Nevada Gaming Control Board’s cease-and-desist letter, the
`
`CFTC overlooked that the letter undermines its position in this appeal. The letter asserts that
`“offering event-based contracts”—of any sort—“is unlawful in Nevada.” Letter at 1. That
`conclusion, it says, follows from Nevada’s definition of “wager” as any money “risked on an
`occurrence for which the outcome is uncertain.” N.R.S. § 463.01962.
`
`The Board’s pretensions to ban all event contracts should come as no surprise—Kalshi
`warned that overbroad definitions of “gaming” that equate the concept with “wagering” inevitably
`generate that absurd result. Appellee Br. 48-49. This letter illustrates the problem in action. What
`is surprising is the CFTC’s apparent endorsement of that logic, which it has attempted (albeit with
`difficulty) to renounce. See, e.g., id. 26-27; Arg. Tr. 62:6-9. The Board’s analysis confirms that
`reading the “gaming” and “unlawful activity” exceptions to sweep in elections would render every
`event contract “unlawful”—a construction of the CEA that “cannot be right.” KalshiEX LLC v.
`CFTC, 2024 WL 4164694, at *8 (D.D.C. Sept. 12, 2024) (recognizing that, under “the CFTC’s
`construction, all event contracts would be subject to review … because they all involve … risking
`money on … some contingent event with the hope of receiving a payoff”). And nothing in the
`letter supports the CFTC’s contrived definition of “gaming” as “staking something of value upon
`the outcome of a contest of others.” See Appellee Br. 43, 55.
`
`The Board’s passing reference to Nevada’s election-betting ban is no help to the CFTC,
`either. Letter 2 (citing N.R.S. § 293.830). Indeed, that statute’s express reference to elections only
`underscores the fundamental problem with the CFTC’s reading of the CEA, because the CEA—
`unlike Nevada state law—says nothing about elections. See Appellant Br. 16.
`
`Finally, the Board’s claimed authority over every “event-based contract” trading on a
`registered exchange contradicts the CFTC’s position that, “due to federal preemption, event
`contracts never violate state law when they are traded on a DCM.” Id. 27.
`
`
`AMSTERDAM • ATLANTA • BEIJING • BOSTON • BRISBANE • BRUSSELS • CHICAGO • CLEVELAND • COLUMBUS • DALLAS
`
`DETROIT • DUBAI • DÜSSELDORF • FRANKFURT • HONG KONG • HOUSTON •
`
`IRVINE • LONDON • LOS ANGELES • MADRID
`
`MELBOURNE • MEXICO CITY • MIAMI • MILAN • MINNEAPOLIS • MUNICH • NEW YORK • PARIS • PERTH • PITTSBURGH
`
`SAN DIEGO • SAN FRANCISCO • SÃO PAULO • SHANGHAI • SILICON VALLEY • SINGAPORE • SYDNEY • TAIPEI • TOKYO • WASHINGTON
`
`
`
`
`
`
`150 W. JEFFERSON, SUITE 2100 • DETROIT, MI 48226-4438
`
`TELEPHONE: +1313.733.3939 • JONESDAY.COM
`
`Direct Number: +1.313.230.7926
`Arice@jonesday.com
`
`
`
`
`CM/ECF
`
`March 7, 2025
`
`Mark Langer
`Clerk of Court
`U.S. Court of Appeals for the D.C. Circuit
`333 Constitution Ave., NW
`Washington, DC 20001
`
`Re: KalshiEx LLC v. Commodity Futures Trading Commission (No. 24-5205)
`
`Dear Mr. Langer:
`
`In its haste to spotlight the Nevada Gaming Control Board’s cease-and-desist letter, the
`
`CFTC overlooked that the letter undermines its position in this appeal. The letter asserts that
`“offering event-based contracts”—of any sort—“is unlawful in Nevada.” Letter at 1. That
`conclusion, it says, follows from Nevada’s definition of “wager” as any money “risked on an
`occurrence for which the outcome is uncertain.” N.R.S. § 463.01962.
`
`The Board’s pretensions to ban all event contracts should come as no surprise—Kalshi
`warned that overbroad definitions of “gaming” that equate the concept with “wagering” inevitably
`generate that absurd result. Appellee Br. 48-49. This letter illustrates the problem in action. What
`is surprising is the CFTC’s apparent endorsement of that logic, which it has attempted (albeit with
`difficulty) to renounce. See, e.g., id. 26-27; Arg. Tr. 62:6-9. The Board’s analysis confirms that
`reading the “gaming” and “unlawful activity” exceptions to sweep in elections would render every
`event contract “unlawful”—a construction of the CEA that “cannot be right.” KalshiEX LLC v.
`CFTC, 2024 WL 4164694, at *8 (D.D.C. Sept. 12, 2024) (recognizing that, under “the CFTC’s
`construction, all event contracts would be subject to review … because they all involve … risking
`money on … some contingent event with the hope of receiving a payoff”). And nothing in the
`letter supports the CFTC’s contrived definition of “gaming” as “staking something of value upon
`the outcome of a contest of others.” See Appellee Br. 43, 55.
`
`The Board’s passing reference to Nevada’s election-betting ban is no help to the CFTC,
`either. Letter 2 (citing N.R.S. § 293.830). Indeed, that statute’s express reference to elections only
`underscores the fundamental problem with the CFTC’s reading of the CEA, because the CEA—
`unlike Nevada state law—says nothing about elections. See Appellant Br. 16.
`
`Finally, the Board’s claimed authority over every “event-based contract” trading on a
`registered exchange contradicts the CFTC’s position that, “due to federal preemption, event
`contracts never violate state law when they are traded on a DCM.” Id. 27.
`
`
`AMSTERDAM • ATLANTA • BEIJING • BOSTON • BRISBANE • BRUSSELS • CHICAGO • CLEVELAND • COLUMBUS • DALLAS
`
`DETROIT • DUBAI • DÜSSELDORF • FRANKFURT • HONG KONG • HOUSTON •
`
`IRVINE • LONDON • LOS ANGELES • MADRID
`
`MELBOURNE • MEXICO CITY • MIAMI • MILAN • MINNEAPOLIS • MUNICH • NEW YORK • PARIS • PERTH • PITTSBURGH
`
`SAN DIEGO • SAN FRANCISCO • SÃO PAULO • SHANGHAI • SILICON VALLEY • SINGAPORE • SYDNEY • TAIPEI • TOKYO • WASHINGTON
`
`
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`
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`USCA Case #24-5205 Document #2104534 Filed: 03/07/2025 Page 2 of 3
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`March 7, 2025
`Page 2
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`Respectfully submitted,
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`/s/ Amanda K. Rice
`Amanda K. Rice
`
`Counsel for Appellee KalshiEx LLC
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`USCA Case #24-5205 Document #2104534 Filed: 03/07/2025 Page 3 of 3
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`March 7, 2025
`Page 3
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`CERTIFICATE OF SERVICE
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`I hereby certify that on March 7, 2025, I served the foregoing Letter on counsel of record
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`using this Court’s CM/ECF system.
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`/s/ Amanda K. Rice
`Amanda K. Rice
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