USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 19 of 97
avoid when it subjected federal exchanges to the CFTC’s exclusive
jurisdiction.
STATEMENT OF JURISDICTION The district court had jurisdiction under 28 U.S.C. § 1331 because the
action arises under the Supremacy Clause of the U.S. Constitution. This
Court has jurisdiction to review the district court’s refusal to issue a
preliminary injunction under 28 U.S.C. § 1292(a)(1). The district court
denied the injunction on August 1, 2025, JA178, and Kalshi timely appealed
that same day, JA179.
STATEMENT OF THE ISSUE PRESENTED Whether the Commodity Exchange Act, which grants the CFTC
“exclusive jurisdiction” over transactions on CFTC -designated exchanges,
preempts application of Maryland gambling laws to exchange-traded sports-
event contracts.
STATEMENT OF THE CASE
I.
L EGAL B ACKGROUND A. States Initially Regulate Futures Trading As Gambling. This appeal involves derivatives: financial instruments whose value
depends on one or more underlying commodities. Futures contracts, one
type of derivative, developed in the United States in the 19th century as a tool
to hedge against fluctuations in commodity prices. Because futures contracts
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