USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 58 of 97
regulate futures trading by treating it as unlawful gambling. In 1888, the
Illinois Supreme Court declared that “dealing in ‘futures’” “ according to the
fluctuations of the market, is void ” because it is “ contrary to public policy ”
and “ a crime ”—a “ species of gambling [that] has become emphatically and pre-eminently the national sin. ” Cothran , 16 N.E. at 648. Before Congress enacted the CEA in 1936, at least 10 states had specifically regulated trading in futures as a type of “ gambling. ” See Addendum 1-4. At least 30 states had bucket-shop laws prohibiting futures contracts where the parties did not intend actual delivery. See Addendum 5-16. State efforts to regulate futures trading as gambling were not hidden — they repeatedly reached the U.S. Supreme Court. See Irwin , 110 U.S. at 508-
509 (Indiana law providing that if the “real intent” of a futures contract is
“merely to speculate in the rise or fall of prices” it is “ nothing more than a wager ”); Pearce v. Rice , 142 U.S. 28, 34-35 (1891) (Illinois law providing that
futures contracts are “ gambling contracts ” ). Indeed, just three years before
Congress enacted the CEA, the Supreme Court held that the Grain Futures
Act “did not supersede any applicable provisions of the Missouri law making gambling in grain futures illegal .” Dickson , 288 U.S. at 198. Against that backdrop, Congress in 1936 unquestionably intended to preserve state gambling laws as applied to trading on federal exchanges, and
43
Made with FlippingBook - Online catalogs