Case: 2:25-cv-01165-SDM-CMV Doc #: 69 Filed: 03/09/26 Page: 14 of 21 PAGEID #: 907
2.
Even if the CEA governs, Kalshi fails to establish that Ohio’s sports gambling laws are preempted.
Even if this Court were to find that sports-event contracts are swaps subject
to the CFTC’s exclusive jurisdiction, Kalshi has not shown that the CEA would
necessarily preempt Ohio’s sports gambling laws.
The Sixth Circuit recently explained the three ways federal law can preempt
state law:
Sometimes, Congress expressly withdraws specified powers from the states. [ Arizona v. United States , 567 U.S. 387, 399 (2012).] Express preemption provisions indicate Congress’s preemptive intent through language rather than through a statute’s structure and purpose. Altria Grp., Inc. v. Good , 555 U.S. 70, 76 (2008).
Preemption can also be implied. There are two kinds of implied preemption: field and conflict.
Field preemption is the principle that States may not regulate conduct “in a field that Congress, acting within its proper authority, has determined must be regulated by its exclusive governance.” Arizona , 567 U.S. at 399. A federally occupied field can cover a narrow subject, so long as Congress intended to exclusively regulate that field. See Oneok, Inc. v. Learjet, Inc. , 575 U.S. 373, 376, 390 (2015) (Natural Gas Act occupies the field of “wholesale sales and transportation of natural gas in interstate commerce,” but preserves state-law antitrust claims based on gas price manipulation). And, in the context of field preemption, the Supreme Court has noted “the importance of considering the target at which the state law aims in determining whether that law is pre- empted.” Id . at 385. Under the principle of conflict preemption, federal law preempts state law if the two “directly conflict.” PLIVA, Inc. v. Mensing , 564 U.S. 604, 617 (2011). That occurs when compliance with both is impossible, or when . . . state law “stand[s] as an obstacle to the accomplishment” of Congress’s objectives. Kansas v. Garcia , 589 U.S. 191, 210–11 (2020); Arizona , 567 U.S. at 399.
Churchill Downs , 162 F.4th at 637–38 (citations simplified).
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