USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 66 of 97
are conducted on DCMs. See Transcon. Gas. , 108 F.4th at 157 (similar
provision “carves out permissible state regulation from an otherwise
preempted field”).
The district court highlighted two “ express preemption clauses ” in
Section 16, citing “Congress’s decision to expressly preempt state gaming
laws for certain transactions” as evidence Congress did not “impliedly
preempt state ” laws falling outside these provisions. JA165-166. But the
district court drew the wrong inference from these provisions. The first
provision — now located in Section 16(h) — is not a preemption provision at
all. Rather, it is a substantive provision prohibiting states from regulating
swaps “ as an insurance contract .” 7 U.S.C. § 16(h). It does not support any
inference about preemption.
The second provision — now located in Section 16(e)(2) — was added to the CEA along with the amendments allowing for “exempt” transactions . See id. § 6(c). Because exempt transactions are not traded on DCMs, they fall
outside the exclusive-jurisdiction provision. Congress enacted Section
16(e)(2) to prevent states from applying their gaming laws to exempted off-
DCM transactions, just as states were already prevented from applying their
gaming laws to on-DCM transactions. As Congress noted in 2000, “the
current” CEA already “ supersedes and preempts” state laws “in the case of
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