USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 37 of 97
B. Maryland’s gambling laws are also conflict preempted as applied to
Kalshi, as Defendants below effectively conceded. Applying state law — not to
mention 50 different state s’ laws — to regulate trading on DCMs stands as an
obstacle to Congress’s objective of exclusive federal regulation of DCMs. It
would also be impossible for Kalshi to comply with Maryland law — which
requires that all trades come exclusively from within Maryland — while
complying with the federal obligation to provide impartial access to a
nationwide exchange. Maryland’s laws also create a conflict in enforcement
because they purport to criminalize conduct that the CFTC, exercising
discretion expressly delegated by Congress, has allowed. II.A. The district court held otherwise by carving out an extratextual
gambling exception from the CFTC’s exclusive jurisdiction based on the
court’s assumption that Congress did not intend to preempt state gambling
laws. But the text of the statute — which unequivocally preempts state
regulation of transactions on DCMs — controls over speculation about
Congress’s unstated intentions. The district court was also wrong about
Congress’s intent. In the decades before the CEA ’s enactment, many states
regulated derivatives trading as unlawful gambling. O ne of Congress’s
principal purposes in granting the CFTC exclusive jurisdiction over
derivatives trading was to end that state regulation.
22
Made with FlippingBook - Online catalogs