Former SEC Chair Gary Gensler helped write the Dodd-Frank definition of a ‘swap.’
Now, Kalshi is using his words to argue its sports event contracts are federally regulated derivatives, not gambling. Gensler says they’ve got it all wrong.
That’s a problem for Kalshi, which has built its entire legal strategy around the argument that sports event contracts are swaps.
The Third Circuit agreed last week, ruling 2-1 that federal law preempts state gambling regulation.
But the Ninth Circuit hears consolidated oral arguments today in the Nevada cases involving Kalshi, Robinhood Markets (NASDAQ:HOOD) and Crypto.com.
If the panel reaches a different conclusion, this likely ends up at the Supreme Court.
What Gensler Undercuts
Kalshi’s legal defense rests on the plain text of the statute. Courts have agreed so far, but Gensler …
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