Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 39 of 110
This Court and the Supreme Court have held that the regulation of
gaming “lie[s] at the heart of the state’s police power.” Artichoke Joe’s Cal.
Grand Casino v. Norton , 353 F.3d 712, 740 (9th Cir. 2003); see Ah Sin , 198
U.S. at 505-06; Flynt v. Bonta , 131 F.4th 918, 927 (9th Cir. 2025). Federal
law “defer[s] to, and even promote[s], differing gambling policies in different
States.” Greater New Orleans Broad. Ass’n, Inc. v. United States , 527 U.S.
173, 187 (1999); see 15 U.S.C. § 3001(a)(1)-(2).
Kalshi thus would need to show exceptionally clear congressional in-
tent to preempt state gaming law. Bond v. United States , 572 U.S. 844, 858-
59 (2014). If the CEA “is susceptible of more than one plausible reading,”
this Court should “accept the reading that disfavors pre-emption.” Altria
Grp., Inc. v. Good , 555 U.S. 70, 77 (2008) (internal quotation marks omit-
ted). Nothing in the CEA shows the necessary intent.
Indeed, the CFTC itself has recognized that it has neither “the statu-
tory mandate nor specialized experience appropriate to oversee” gaming. 89
Fed. Reg. at 48982-83. It has prohibited DCMs from listing contracts that
involve “gaming,” 17 C.F.R. § 40.11(a)—and Kalshi admits that sports bets
are “gaming,” 1-ER-15 n.3. So Kalshi has listed its contracts in direct vio-
lation of the CFTC’s own rules. Kalshi cannot claim the protection of the
CFTC when the CFTC has said it is not a gambling regulator and does not
want gambling on DCMs.
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