Case 1:25-cv-14723 Document 10-1 Filed 08/19/25 Page 20 of 34 PageID: 92
customers—are subject to the CFTC’s exclusive jurisdiction, and New Jersey law is preempted
to the extent it purports to regulate those transactions.
A. The CEA Preempts Application of State Gaming Laws to Sports-Related Event Contract Trading on CFTC-Designated Exchanges.
The Constitution and laws of the United States “shall be the supreme Law of the Land,”
U.S. Const. art. VI, cl. 2, and accordingly, “Congress has the power to preempt state law.”
Crosby v. Nat. Foreign Trade Council , 530 U.S. 363, 372 (2000). Federal law can preempt state
law expressly, through a statement to that effect in the statute itself, or impliedly, through either
field preemption or conflict preemption. Field preemption exists where Congress manifests an
intent to occupy exclusively an entire field of regulation. See Fidelity Fed. Sav. & Loan Ass’n v.
De la Cuesta , 458 U.S. 141, 153 (1982). Conflict preemption exists where compliance with
federal and state law is “a physical impossibility” or when “state law stands as an obstacle to the
accomplishment and execution of the full purposes and objectives of Congress.” Id. (internal
quotation omitted). Here, as the Court already found, the statutory language of the CEA, its
legislative history and the comprehensive regulatory framework it sets out demonstrate that
Congress deliberately preempted state law. Whether analyzed as express or implied preemption,
the scope of preemption is the field of commodity futures and swaps trading, including event
contract trading, on CFTC-designated exchanges.
First , the CEA provides expressly that the CFTC “shall have exclusive jurisdiction” over
commodity futures and swaps trading on CFTC-designated exchanges. 7 U.S.C. § 2(a)(1)(A).
Express provisions of this type are regularly held to preempt state law. See, e.g. , BNSF Ry. Co.
v. Cal. Dep’t of Tax & Fee Admin. , 904 F.3d 755, 765-66 (9th Cir. 2018) (describing statute’s
grant of “exclusive” jurisdiction as a “broad and general” preemption provision); Slaney v. Int’l
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