USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 61 of 97
apply their gambling laws to sports-event contracts, nothing in the CEA
would prevent states from applying state gambling laws to futures contracts
as well, just as they did a century ago — a position the district court itself
recognized was wrong and that Defendants below disavowed. B. The District Court Erred In Rejecting Field Preemption. Setting aside the district court’s fundamental error in reading an
extratextual gambling exception into the CEA’s text, none of the court’s
grounds for rejecting field preemption withstands scrutiny. First , the district court relied heavily on the Special Rule, but the
Special Rule supports Kalshi. The Special Rule gives the CFTC discretion to
prohibit the trading of certain categories of contracts if (but only if) the CFTC
determines they are “contrary to the public interest . ” 7 U.S.C. § 7a-
2(c)(5)(C). Among the categories enumerated in the Special Rule are contracts involving “gaming.” Id. “Gaming” means “the practice or activity of playing games” and “playing games for stakes , ” KalshiEX , 2024 WL 4164694, at *8 (quotations omitted), including sports games like a “football match, ” Gaming contract , Chambers Dictionary (13th ed. 2014). Thus, even
if the district court were right that Kalshi’s sports -event contracts involve
“gaming,” JA166, that would make them among the “event contracts ” subject
to the CFTC’s “review and approval , ” and thus subject to the CFTC’s exclusive
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