2:25-cv-575-APG-BNW MOTION HEARING - ROUGH DRAFT - DO NOT CITE!!!
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Spoiler alert, I'm going to grant a limited injunction, minor limited injunction. First, Kalshi has shown a likelihood of success on the merits at this stage because under 7 U.S.C., Section 2(a)(1)(A), the CFTC has exclusive jurisdiction over accounts, agreements and the like involving swaps or contracts for the sale of a commodity. Kalshi is a CFTC-designated market under Section 7, and through that exclusive jurisdiction provision, Congress has occupied the field of regulating CFTC-designated markets like Kalshi's. It's not field preemption of gaming; it's field preemption of regulating CFTC-designated markets. I agree with the 2nd Circuit which held that Section 2(a)(1)'s exclusive jurisdiction language preempts the application of State law to CFTC-designated markets. That comes from the case of Leist , L-E-I-S-T, vs. Simplot , S-I-M-P-L-O-T, 638 F.2d 283 at 322, 2nd Circuit, 1980, affirmed by the U.S. Supreme Court later. Similarly, the D.C. Circuit has recognized that Congress intended the CFTC to have exclusive jurisdiction, quote, with regard to the trading of futures on organized contract markets. That's FTC vs. Ken Roberts Company , 276 F.3d 583 at 590. The CFTC has also stated that, quote, Due to Federal preemption, event contracts never violate State law when they are traded on a DCM, closed quote, meaning that the
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UNITED STATES DISTRICT COURT Judy K. Moore, RMR, CRR
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