USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 72 of 97
comply with Maryland law ” and avoid “ compliance costs.” JA176. It is
emphatically incorrect that Kalshi objects to mere compliance costs. Instead,
Maryland law imposes obligations that are irreconcilable with Kalshi’s
obligations under federal law. Kalshi, for example, cannot comply with
Maryland’s requirement to take trades only from individuals physically
located in Maryland without violating its federal obligation to provide
“impartial access” to traders nationwide. 17 C.F.R. § 38.151(b). The district
court ’s rejoinder—that Kalshi can “ offer sports-event contracts to Marylanders ” if it “ obtain[s] a license ,” JA175 — is a non sequitur . If Kalshi
obtains a license, Maryland law would limit Kalshi to operating in Maryland
only, which would be impossible for a nationwide exchange. And if Maryland
could impose this kind of geographical limit, so could every other state. Second, the district court wrongly dismissed conflict preemption “[f]or
the reasons ” why it rejected field preemption. JA173. Although “ principles
of field and conflict preemption ” can be “ mutually reinforcing, ” they operate as “two alternative theories . ” Nazarian , 753 F.3d at 474, 478. The district
court stated that the CEA and Maryland’s gambling laws “work in tandem,”
JA175, but its support for that conclusion is unpersuasive. The district court
defined the CEA’s purpose at a high level of generality—“to address the
efficient functioning of the derivatives and futures markets,” JA 175 — then
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