The post CFTC’s Failure To Enforce ‘Gaming’ Contract Ban Could Still Upend Kalshi Sports Betting Lawsuits appeared on BitcoinEthereumNews.com.

(Photo by Mario Hommes/DeFodi Images via Getty Images) DeFodi Images via Getty Images By its own admission, Kalshi is offering a sports betting product – across all 50 states. Kalshi has repeatedly advertised its sports-event contracts on social media as “The First Nationwide Legal Sports Betting Platform”; “Betting on Kalshi, the first app for legal sports betting in all 50 states”; and “Sports Betting Legal in all 50 States on Kalshi.” (see here and here). Not only does the federal Wire Act criminalize that activity – as it constitutes the interstate transmission of bets or wagers through interstate commerce – but the CFTC’s own regulation (Rule 40.11(a)(1)) prohibits the offering of event contracts involving or relating to “gaming.” Rule 40.11(a)(1) imposes a blanket ban on all event contracts involving “gaming,” “war,” “terrorism,” “assassination,” and “activity that is unlawful under State or Federal Law.” The inclusion of the italicized word “Prohibition” at the outset of the Rule is a dead giveaway. As explained by acting CFTC Chair Caroline D. Pham: In promulgating Rule 40.11(a)(1) pursuant to Section 5c(c)(5)(C), the Commission determined that an event contract that “involves, relates to, or references” terrorism, assassination, war, gaming, or illegal activity is prohibited because it is contrary to the public interest. There is no further public interest test in Rule 40.11(a)(1). Incoming CFTC Chairman Brian Quintenz has likewise acknowledged that Rule 40.11(a)(1) imposes a “blanket prohibition” on any event contract that involves or relates to “gaming.” In a May 24, 2021 public appearance before the Federalist Society, then-Commissioner Quintenz was asked whether the CFTC “is required to prevent the listing of a contract that’s considered gambling.” Quintenz’s response: “the regulation we wrote requires us to.” Several months earlier, Commissioner Quintenz wrote that if an event contract “is found to be an enumerated event contract,…

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Filed under: News - @ May 28, 2025 12:19 am