Case 2:25-cv-00978-APG-BNW Document 42 Filed 08/04/25 Page 14 of 26
and Lincoln). 5 Cumulatively, this elaborate regulatory structure unmistakably demonstrates Congress’s intent to occupy the field of futures contracts on federally designated exchanges. Individually, and in aggregate, the text, history, purpose, and comprehensive structure of the CEA demonstrate that Congress intended to occupy the field of derivatives traded on federally designated contract markets. As a result, Nevada’s gaming laws are field preempted as applied to CDNA’s Sports Event Contracts. 3. Nevada Gaming Laws Are Conflict Preempted as Applied to CDNA. The NGCB’s cease-and-desist order directed CDNA to take one of two options: Either permanently stop offering trading of Sports Event Contracts in Nevada or stop offering them until CDNA obtains a sports wagering license under Nevada law. Either option would directly conflict with the congressional objectives underlying the CEA and would put CDNA at odds with specific regulatory requirements for operating a DCM. See Crosby v. Nat’l Foreign Trade Council , 530 U.S. 363, 373 (2000) (“If the purpose of the act cannot otherwise be accomplished—if its operation within its chosen field else must be frustrated and its provisions be refused their natural effect— the state law must yield to the regulation of Congress . . . . ”) (quoting Savage v. Jones , 225 U.S. 501, 533 (1912)). Application of Nevada’s gaming laws to Sports Event Contracts would frustrate congressional purposes of uniformity of regulation and uniformity of enforcement as applied to derivatives traded under CFTC oversight, as well as furtherance of the CFTC’s Core Principles, and would jeopardize CDNA’s designation as a DCM. First , application of Nevada’s sports wagering laws to CDNA would frustrate the CEA’s purpose of bringing futures markets “under a uniform set of regulations.” Am . Agric. Movement , 977 F.2d at 1156. As the Seventh Circuit noted, “a contract market could not operate efficiently, and perhaps not at all, if varying and potentially contradictory legal standards governed its duties to investors.” Id . The assertion of state authority and the demands in the NGCB’s cease-and- 5 Former members of Congress recently filed an amicus brief in the Third Circuit in connection with Kalshi v. Flaherty . Br. of Amici Curiae Seven Former Members of Cong. in Supp. of Pl.-Appellee, KalshiEX LLC v. Flaherty , No. 25-1922 (3d Cir. July 31, 2025), ECF No. 66. In that brief, amici, including drafters of the Special Rule, affirmed the purpose of the Special Rule was to give the CFTC exclusive authority to govern which event contracts may be traded on registered exchanges. See id. at 26–30.
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