USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 18 of 97
congressional intent to fashion an extratextual “gambling” exception to the
CFTC’s exclusive jurisdiction. But courts “may not replace the actual text with speculation as to Congress ’ intent.” Just Puppies, Inc. v. Brown , 123
F.4th 652, 661 (4th Cir. 2024) (quotation omitted). Moreover, overwhelming
evidence refutes the district court’s speculation that Congress would not have
intended the CEA to preempt state gambling laws. To the contrary, for as
long as derivatives trading has existed in this country, states have sought to
regulate such trading as unlawful gambling. Congress was aware of these
efforts and answered them by drawing a clear line: States may regulate off-
exchange trading, but regulation of trading on DCMs is reserved for the
CFTC.
If affirmed, the district court’s decision would decimate the CFTC’s
exclusive jurisdiction. It would give states authority to enforce not only their sports-wagering laws, but all state gambling laws, as to trading on DCMs.
Many states broadly define gambling in a way that would encompass the
trading of all event contracts, or even all futures contracts, which necessarily
involve placing a financial position on a contingent future event. Allowing
states to regulate such trading as gambling would nullify the CFTC’s
authority and undermine the nationwide uniformity necessary for
derivatives markets to work — the very consequences Congress sought to
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