Developing The Man Whose Name Is on the Statute Filed Against Kalshi Today. So Did the Chairman Who Wrote Sixty-Seven Rules Under It

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Four amicus briefs went onto the Supreme Court's docket in Flaherty v. KalshiEX, LLC, No. 26-299, on Thursday. One came from the National Football League. One came from 145 Indian tribes and tribal organisations. The other two came from the two men most responsible for the statute this entire fight is about: Christopher J. Dodd, who sponsored the bill, and Gary Gensler, who ran the agency that implemented it.

Yesterday this desk wrote that the amicus side of the case was "effectively closed." It was not. That was wrong, and it was wrong in an interesting direction — the heavyweight filings were still coming.

Kalshi's position, reduced to a sentence, is that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 moved sports betting out of state hands and into the Commodity Futures Trading Commission's. The Third Circuit agreed in April. The Sixth and Ninth Circuits did not. On Thursday the senator whose name is on the act filed a brief saying Congress did no such thing, and the chairman who wrote sixty-seven rules, orders and guidance documents implementing it filed one saying the same.

This is weaker evidence than it looks

Start with what a careful reader should hold against these briefs, because the strongest version of Kalshi's reply is available and obvious.

Statements by legislators about what a statute means, made sixteen years after enactment and inside litigation, are close to worthless as a matter of interpretive method. The current Court says so repeatedly. The NFL's brief, filed the same day on the same side, cites Scalia's A Matter of Interpretation — a book whose central argument is that the intentions of individual members of Congress are not law and that judges who consult them are usually consulting themselves. Dodd's recollection of what he meant in 2010 binds nobody. Neither does Gensler's.

The partisan read is available too. Gensler is a polarising figure who left the SEC in 2025, and a brief from him lands in a political environment where the CFTC's current posture toward event contracts is notably friendlier than his was. There is a version of Thursday where these filings harden the exchange's allies rather than persuading anyone.

And Kalshi has a textual response on the Special Rule that is not frivolous. Section 7a-2(c)(5)(C) permits the Commission to determine that contracts involving gaming are contrary to the public interest and may not be listed. Permission implies the contracts are otherwise within the system. The CFTC has never made that determination for sports event contracts; it proposed a rule in June 2024 and withdrew the proposal in February 2026. On that reading, Congress contemplated gaming contracts on designated contract markets and left the gate-keeping to an agency that has declined to close the gate.

So: two famous names, limited interpretive weight, an available counter. If that were all Thursday produced, it would be a press cycle.

The argument that survives all of that

It is not all Thursday produced. Dodd's brief contains one argument that works whether or not you care what Christopher Dodd remembers, because it is about the consequences of Kalshi's own reading of the text.

The Commodity Exchange Act makes it unlawful for a person who is not an eligible contract participant — which is to say, an ordinary person — to enter into a swap except on a registered exchange. That is 7 U.S.C. §2(e). It is one of the central retail-protection provisions Dodd-Frank added, and it exists because Congress had just watched what happened when complex instruments were sold off-exchange.

Now apply Kalshi's position. Kalshi says a sports-betting contract is a swap. If a sports-betting contract is a swap, then every off-exchange sports bet placed by an ordinary bettor in America is an unlawful off-exchange swap transaction. Every parlay at a state-licensed retail sportsbook. Every bet at a tribal book operating under a compact negotiated under the Indian Gaming Regulatory Act. Dodd's brief says this plainly: if sports-betting contracts are swaps, then off-exchange sports betting by ordinary bettors, "including sports betting authorized by the IGRA, would be illegal."

That is not an appeal to memory. It is a reductio drawn from the respondent's own premise, and the only way out of it is to say that a sports wager becomes a swap when a federally registered exchange lists it and remains not-a-swap when a sportsbook in Cleveland books it. Which is exactly what Dodd's brief says the Third Circuit's rule amounts to: "a platform's federal registration, rather than the substance of the activity," decides whether state gaming law applies. Same wager. Same risk. Different letterhead.

It also explains why 145 tribes filed on the same day. The tribal interest here is not an abstraction about federalism. If the Third Circuit's reading stands, the compacts are worth less, and if Dodd's §2(e) point is right, the compacts may be worth something strange.

The definitional point, and the part nobody can hedge

The second durable argument is about what a swap is. The statutory definition at §1a(47)(A)(ii) requires an underlying event or contingency "associated with a potential financial, economic, or commercial consequence." Dodd's brief makes the move that the Sixth and Ninth Circuits both made and the Third Circuit did not: the payout cannot itself be the consequence. "Otherwise, every bet would become a swap because money changes hands, and the limiting language Congress enacted would perform no work."

Then the line that does the most damage in the fewest words: traditional derivatives manage preexisting risk, while "a sports wager creates a risk that did not previously exist." A farmer who sells a wheat future owns wheat. A man who buys a contract on the Commanders making the playoffs owns nothing until he buys it.

Gensler's brief adds the piece of context that is hardest to argue with and least discussed. Harry Reid was Senate Majority Leader when Dodd-Frank passed. Before the Senate, Reid chaired the Nevada Gaming Commission from 1977 to 1981. Gensler's framing: nobody working on the bill was "attempting to put a curve ball by the Senate Majority Leader to legalize a national sports-betting regime or preempt the Nevada Gaming Commission." You can dismiss that as atmosphere. It is still the single least plausible thing about the Third Circuit's holding — that a sports-betting preemption of this scale cleared a chamber run by Nevada's senior senator without anyone noticing.

And there is one thing we should say rather than smooth over: we do not know whether any of this matters to the Court's grant decision. Cert is granted on splits and consequences, not on the quality of amicus prose. The split is already four circuits deep, the Tenth Circuit denied Kalshi an injunction pending appeal on September 8 and the Southern District of Iowa ruled against it the same day. That record was going to get this petition a hard look with or without Thursday's filings.

Where we come down, and what would change it

We have argued since the Ninth Circuit ruled that criminalising a federally licensed exchange is the wrong instrument, and we still think state attorneys general reaching for criminal process against a CFTC-registered DCM is bad policy. None of that requires believing Kalshi's statutory argument, and Thursday is the day to say so clearly: the reading that sports wagers are swaps proves far too much. It makes the CFTC — an agency with no licensing regime, no minimum-age rule, no self-exclusion programme and no advertising rules — the national gambling regulator by accident, and it does so through a mechanism, self-certification under 17 C.F.R. §40.11(a), in which the exchange decides what to list and the Commission may simply not respond.

What would falsify this: if Kalshi's brief in opposition, due November 9, answers the §2(e) problem without conceding that registration is doing the work. If there is a textual reading under which a listed event contract is a swap and an identical wager at a Nevada sportsbook is not, and it does not reduce to "because we registered," we will write that piece. Seven weeks is a long time to find one.