USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 17 of 97
Federal law therefore bars Maryland from regulating Kalshi’s contracts
under straightforward principles of both field and conflict preemption.
Holding otherwise would contravene Congress’s judgment that a “ contract
market could not operate efficiently, and perhaps not at all, ” if subject to
“ varying and potentially contradictory legal standards .” Am. Agric. Movement, Inc. v. Bd. of Trade of Chi. , 977 F.2d 1147, 1156 (7th Cir. 1992).
If Maryland could enforce its laws against Kalshi, so could 49 other states,
subjecting Kalshi to a patchwork of contradictory regulation, interfering with
the CFTC’s uniform oversight, conflicting with Kalshi’s federally imposed
obligation to provide impartial access to its exchange , and resulting in “total chaos. ” Id. (quotation omitted). Even the Defendants below conceded that
state gambling laws “conflict [] with ” the CFTC’s oversight . JA89-90. That
concession should end this case: Where federal and state law conflict, under
the Supremacy Clause, federal law prevails.
To Kalshi’s knowledge, the court below is the first to hold that states
remain free to regulate transactions textually committed to the exclusive
jurisdiction of the CFTC. Its decision conflicts with every court of appeals to
address a similar question and with two district courts that have
preliminarily enjoined substantially similar state efforts. Brushing aside the
CEA’s unequivocal text, the district court invoked various assumptions about
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