One answer, two readings

On September 22nd, 2023, the Commodity Futures Trading Commission (CFTC) found that Kalshi's contracts involved "gaming and activity that is unlawful under state law and are contrary to the public interest." Kalshi is a prediction market where users trade contracts on whether or not certain events will occur. Two-and-a-half years later, however, the same CFTC is taking an opposing position in a related jurisdictional fight. In April 2026, the Commission sued New York, pleading for a federal court to declare that federal law gives the CFTC exclusive authority over CFTC-registered event contracts and to prevent New York from enforcing state laws that the agency argues are preempted. Essentially, the entire case stems from differing interpretations of a specific word, "gaming," in the Dodd-Frank Act.

The Dodd-Frank Act was drafted after the 2008 Recession as a way to prevent banks from over-speculating and crashing the economy in the future. However, one of the major provisions in the Act surrounds approval for contracts. In the wording of section 745(b), "the Commission may determine that such agreements, contracts, or transactions are contrary to the public interest if the agreements, contracts, or transactions involve… gaming." However, gaming is never again mentioned and is never defined in writing. For this reason, the authors of the clause, the late Senator Dianne Feinstein (D-CA) and former Senator Blanche Lincoln (D-AR), worked together to create a colloquy, or a written record of their intent put on the record, in drafting the clause.

Lincoln, on the provision in question, stated in their colloquy, entered into the Congressional Record on July 15, 2010, that the purpose of the gaming clause is to ensure the commission "has the power to prevent the creation of futures and swaps markets that would allow citizens to profit from devastating events and also prevent gambling through futures markets." Feinstein, later in the colloquy, asks whether the Commission would "have the power to determine that a contract is a gaming contract if the predominant use of the contract is speculative as opposed to a hedging or economic use." Lincoln replies: "That is our intent." This exchange has been a major subject of contention in both of the CFTC's documents. In its 2023 order, the CFTC argued that the two clauses, Feinstein's question as well as Lincoln's response, should be read together, arguing that there is a united intent between the two senators. However, in its 2026 Federal Register notice, the CFTC argued that Lincoln and Feinstein were, throughout the colloquy, talking about different types of contracts and therefore, Lincoln never adopted Feinstein's interpretation. It is important to keep in mind that in neither document did the CFTC claim definitively that the colloquy establishes one precedent or another. Instead, they suggest that these are "preliminary findings" or that they "appear to be" talking about different contracts, leaving significant room for interpretation.

If both documents hedge against the exact wording of the colloquy, the agency itself recognizes the ambiguity of its interpretation of intent. The statute, colloquy, and the wording did not change between 2023 and 2026. Yet somehow, the same institution, looking at the same document, came to exactly opposite conclusions about Feinstein's and Lincoln's intentions. If the wording did not change yet the stance did, then the fulcrum for change was not the statutory text, but instead the institution interpreting it.