Case: 25-1922 Document: 73 Page: 16 Date Filed: 08/14/2025
exchange, or market.” 7 U.S.C. § 2(a)(1)(A). And the Act specifically out- laws any “swaps” outside covered exchanges. Id. § 2(e); id. § 6d(a)(1); see Appellants’ Br. 16–18, 43–44. So Kalshi’s interpretation of “swap,” paired with the Act’s plain structure, means that any wager placed on any event—including raffles or classic casino games—would be a swap sub- ject to the CFTC’s “exclusive jurisdiction.” And if “exclusive jurisdiction” equates to field preemption, as Kalshi would have it, then there are no “other applications” over which state gambling laws could operate. See Appellants’ Br. 43–44. Second, all federal gambling laws accept or incorporate state law regardless of whether those state laws regulate activity that happens to occur on CFTC-regulated exchanges. If Kalshi is using five or more peo- ple to manage a long-running and profitable gambling business that is illegal under state law, the company is violating the Illegal Gambling Business Act no less than former-NBA star Gilbert Arenas. See 18 U.S.C. § 1955; Indictment, United States v. Gershman , 2:25-cr-00595 (C.D. Cal. July 15, 2025). In other words, there is no indication that Congress’s dec- ades-long preservation of state gambling law was contingent on those state laws leaving CFTC-regulated exchanges untouched. That is equally true for the Unlawful Internet Gaming Enforcement Act of 2006. Appellee Br. 42, 52. Everyone agrees that the statute’s defi- nition of “unlawful Internet gambling” hinges on state law. Id. But be- cause that statute then carves out “any transaction conducted on or
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