Case 1:25-cv-02152-ESK-MJS Document 15 Filed 04/18/25 Page 31 of 51 PageID: 152
designated contract markets. See id. But that does not mean the CFTC is the only regulatory authority responsible for doing so. The CFTC does not have expertise in interpreting state laws. That’s why state regulatory authorities are simultane- ously responsible for applying their own state laws. To hold otherwise would make the CFTC—a federal agency responsible for regulating U.S. derivatives markets—the final arbiter of state laws ranging from election law to sports wa- gering in more than 50 jurisdictions covering 340 million people. That would be bizarre; even federal courts do not authoritatively interpret state law. See Pinho v. Gonzales , 432 F.3d 193, 212 (3d Cir. 2005); Speiser v. Randall , 357 U.S. 513, 522 n.7 (1958) (noting it is a “basic constitutional principle that the construction of state laws is the exclusive responsibility of the state courts”). And Congress’s incorporation of state law into the special rule was plainly meant to parallel, not usurp, the States’ enforcement of their own laws. This is reinforced by Congress’s decision not to include state gaming laws affecting event contracts in the CEA’s two express-preemption provisions. See 7 U.S.C. § 16. One provision says that the CEA “supersede[s] and preempt[s] the application of any” state law “that prohibits or regulates gaming” for certain exempt or excluded transactions—but not for event contracts on a designated contract market, as Kalshi’s are here. Id. § 16(e)(2). Similarly, another express- preemption provision makes clear that, to the extent insurance laws can be con- strued as applying to swaps, those laws are expressly preempted. Id. § 16(h). Congress’s decision to expressly preempt state gaming laws for certain transactions and state-insurance laws for swaps—and silence as to all others—is
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