Case 1:25-cv-01283-ABA Document 26 Filed 05/09/25 Page 31 of 36
not satisfy the prerequisites of being a swap or commodity future. See surpra §I.A. In contrast,
the preemption arguments raised in Kalshi’s Motion address only the regulation of swaps after
they are lawfully listed on a DCM. ECF 2 at 9-16. Neither Kalshi nor the prior federal courts
rulings, however, provide even a plausible reading of “swap” or “contracts of sale of a commodity
for future delivery” or Regulation 40.11(a)(1) that would place Kalshi’s gaming devices in the
CFTC’s exclusive jurisdiction. Certainly, nothing presented by Kalshi or the prior court rulings is
persuasive enough to overcome strong presumption that the CFTC’s “exclusive jurisdiction” was
not intended to supersede Maryland’s exclusive police power to regulate gaming within its borders.
The statute’s text and legislative history make clear that Kalshi’s gaming devices are not within
the CFTC’s exclusive jurisdiction because they are neither swaps nor commodity futures and are
expressly prohibited by Regulation 40.11(a)(1).
Where a particular transaction does not fall within the CFTC’s exclusive jurisdiction, the
CEA expressly preserves state law: “Except as [provided in the exclusive-jurisdiction provision],
nothing contained in this section shall (I) supersede or limit the jurisdiction at any time conferred
… under the laws of … any State, or (II) restrict … such other authorities from carrying out their
duties and responsibilities in accordance with such laws.” 7 U.S.C. § 2(a)(1)(A). As courts have
recognized, this clause “makes clear that other agencies” still “retain their jurisdiction over all
matters beyond the confines of” the exclusive-jurisdiction provision. FTC v. Ken Roberts Co. , 276
F.3d 583, 591 (D.C. Cir. 2001). Kalshi’s gaming devices are neither commodity futures nor swaps,
and are prohibited from listing on DCMs and, therefore, are outside the CFTC’s exclusive
jurisdiction. Because Kalshi’s gaming devices are outside this jurisdiction, preemption is not an
issue and Maryland may properly regulate these gaming devices under its sports gaming laws.
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