Case 1:25-cv-02152-ESK-MJS Document 15 Filed 04/18/25 Page 24 of 51 PageID: 145
“vice activity,” and States have an interest in reducing “the social costs associ- ated with” it, Greater New Orleans Broad. Ass’n, Inc. v. United States , 527 U.S. 173, 185 (1999), to promote the “welfare, safety, and morals” of their citizens, Arti- choke Joe’s Cal. Grand Casino , 353 F.3d at 737. The Sports Wagering Act therefore lies at the heart of New Jersey’s tradi- tional police powers and Kalshi bears a heavy burden to demonstrate that it is preempted. But, as discussed below, it cannot bear that burden. B. Congress did not field preempt state sports-wagering laws that regulate event contracts. Field preemption applies only “[i]n rare cases,” where “Congress ‘legis- lated so comprehensively’ in a particular field that it ‘left no room for supple- mentary state legislation.’” Kansas , 589 U.S. at 208 (quoting R.J. Reynolds To- bacco Co. v. Durham County , 479 U.S. 130, 140 (1986)). In assessing field preemp- tion, courts must avoid “interpreting the scope of the preempted field too broadly.” Sikkelee , 822 F.3d at 689. Here, the text of the CEA establishes that Congress did not intend to occupy the field of state law regulating event con- tracts, and nothing in the case law or legislative history indicates otherwise. 1. The CEA’s plain text shows that Congress did not displace state sports-wagering laws that regulate event contracts. The text of the CEA makes clear that Congress did not intend to preempt the field of regulation of derivatives trading on CFTC-regulated exchanges. Start with the provision on which Kalshi bases its field preemption claim: the exclusive-jurisdiction provision. 7 U.S.C. § 2(a)(1)(A). That provision gives the CFTC “exclusive jurisdiction” over “accounts, agreements …, and
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