{"id":76688,"date":"2026-08-11T23:49:42","date_gmt":"2026-08-11T23:49:42","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/connecticut-judge-says-kalshi-sports-contracts-were-never-swaps\/"},"modified":"2026-08-11T23:49:42","modified_gmt":"2026-08-11T23:49:42","slug":"connecticut-judge-says-kalshi-sports-contracts-were-never-swaps","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/connecticut-judge-says-kalshi-sports-contracts-were-never-swaps\/","title":{"rendered":"Connecticut Judge Says Kalshi Sports Contracts Were Never Swaps"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Judge Vernon Oliver held Kalshi\u2019s sports contracts are not swaps under the CEA.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Sports contracts were 80% to 90% of Kalshi\u2019s listings and revenue, the order says.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The CFTC has never reviewed a single Kalshi sports contract under its special rule.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Not Swaps, and Not Preempted Even If They Were<\/h2>\n<p>U.S. District Judge Vernon D. Oliver\u2019s <a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.ctd.168203\/gov.uscourts.ctd.168203.94.0_1.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">ruling rests on a threshold point rather than preemption<\/a>: for the CFTC\u2019s exclusive jurisdiction to attach, a contract must be a swap traded on a designated contract market. Oliver held it is the judiciary\u2019s role, not the agency\u2019s, to decide what counts as a swap, rejecting Kalshi\u2019s argument that any such challenge must be brought against the CFTC itself.<\/p>\n<p>On the statute, Oliver read \u201cthe occurrence, nonoccurrence, or the extent of the occurrence of an event\u201d to concern whether an event happens and to what degree, not its outcomes. He adopted the <a href=\"https:\/\/news.bitcoin.com\/crypto-com-prediction-exchange-seeks-federal-shield-ahead-of-washington-crackdown\/\">reasoning of the District of Nevada<\/a> in a case brought by a Crypto.com-owned exchange \u2013 which found that dictionaries treat \u201cevent\u201d as meaning \u201coutcome\u201d 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.<\/p>\n<p>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\u2019s own concession in earlier litigation before the D.C. Circuit that contracts on games are unlikely to serve any commercial or hedging interest.<\/p>\n<p>Between 80% and 90% of the contracts listed on Kalshi\u2019s exchange were sports-event contracts, responsible for a similar portion of company revenue. The CFTC has not subjected a single one to review under the special rule, let alone prohibited any. Kalshi was valued at roughly $11 billion at February\u2019s hearing and has about 24,000 Connecticut users.<\/p>\n<p>Oliver reached preemption anyway and rejected it on both theories. The special rule at \u00a7 7a-2(c)(5)(C), which lets the CFTC bar contracts involving gaming or activity unlawful under state law, reflects an intent to preserve state authority rather than displace it. Federal impartial-access rules bar discriminatory access criteria; they do not require a DCM to offer contracts nationwide. And he was unwilling to read Dodd-Frank as handing exclusive authority over sports betting to a financial regulator with no history in the field, noting that Congress has never appropriated funds to the CFTC for that purpose.<\/p>\n<p>Kalshi also lost on irreparable harm. Its asserted injuries were largely monetary, and to a significant extent self-inflicted, given that it kept listing the contracts through repeated regulatory warnings and adverse rulings. Because Kalshi is already building geofencing for other states, Oliver found Connecticut compliance unlikely to add much cost. He noted Kalshi has issued no warnings to users while advertising itself as the first app for legal sports betting in all 50 states.<\/p>\n<p>The crypto exposure runs through a separate five-page order. <a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.ctd.168439\/gov.uscourts.ctd.168439.93.0.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Coinbase Financial Markets<\/a> began offering Kalshi\u2019s contracts through its platform in January 2026 as a futures commission merchant rather than a DCM, and Connecticut never directed any enforcement at it. Oliver denied the motion \u201clargely in line with\u201d the Kalshi order and attached that opinion as an exhibit. Connecticut\u2019s December sweep had also named Robinhood Derivatives and Crypto.com: <a href=\"https:\/\/portal.ct.gov\/dcp\/news-releases-from-the-department-of-consumer-protection\/2025-news-releases\/connecticut-consumer-protection-orders-cease-and-desist-conducting-unlicensed-online-gambling\" target=\"_blank\" rel=\"noopener noreferrer\">DCP announced all three orders<\/a> on Dec. 3, with Gaming Director Kris Gilman saying a prediction market wager is not an investment, and Commissioner Bryan T. Cafferelli saying the platforms would violate other state laws even if licensed, including by taking wagers from people under 21.<\/p>\n<p>Oliver\u2019s order counted 14 suits Kalshi has filed against states, with federal courts split and every state court to rule so far ruling against it. He cited <a href=\"https:\/\/news.bitcoin.com\/igaming\/utah-judge-rejects-kalshis-federal-shield-from-gambling-laws\/\">KalshiEX LLC v. Cox<\/a>, decided in Utah on Aug. 4, and went further than <a href=\"https:\/\/news.bitcoin.com\/igaming\/minnesota-judge-blocks-prediction-market-ban-but-says-some-contracts-arent-swaps\/\">Minnesota\u2019s judge<\/a>, who blocked that state\u2019s ban while treating a World Cup winner contract as likely a swap. Massachusetts, Nevada, and Michigan state courts have all ordered geofencing; Kalshi pledged to implement it in Nevada by Aug. 12 and faces the same date in Michigan.<\/p>\n<p>A Kalshi spokesperson told Sports Betting Dime (a Sportradar subsidiary) the company respectfully disagrees with the decision and is considering all legal options. Oliver ordered the parties to file their Rule 26(f) report by Aug. 24, with Connecticut\u2019s response to the complaint due Aug. 31.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/igaming\/connecticut-judge-says-kalshi-sports-contracts-were-never-swaps\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways Judge Vernon Oliver held Kalshi\u2019s sports contracts are not swaps under the CEA. Sports contracts were 80% to 90% of Kalshi\u2019s listings and revenue, the order says. The CFTC has never reviewed a single Kalshi sports contract under its special rule. Not Swaps, and Not Preempted [&hellip;]<\/p>\n","protected":false},"author":3947362403,"featured_media":76689,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/76688"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362403"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=76688"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/76688\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/76689"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=76688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=76688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=76688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}