Case: 25-7831, 03/10/2026, DktEntry: 81.1, Page 31 of 43
III. The federalism canon forecloses the expansive authority the CFTC now asserts. A. The CFTC’s position also runs afoul of the federalism canon. As the States’ earlier briefing explained, State-Amicus Br.17–21, the canon requires courts “to be certain of Congress’ intent before finding that fed- eral law overrides the usual constitutional balance of federal and state powers.” Bond , 572 U.S. at 858 (quotation omitted). Courts should thus be especially “reluctant to find” preemption in an area “traditionally gov- erned by state law.” CSX Transp., Inc. , 507 U.S. at 664. Gambling is exactly such a field. The States have long exercised their police powers to regulate gambling. Or, in this Court’s words, “the regu- lation of gambling lies at the heart of the state’s police power.” Artichoke Joe’s Cal. Grand Casino v. Norton , 353 F.3d 712, 737 (9th Cir. 2003) (quo- tation omitted). Federal law has thus historically “defer[red] to, and even promote[d], differing gambling policies in different States.” Greater New Orleans Broad. Ass’n, Inc. v. United States , 527 U.S. 173, 187 (1999). The States may, as a result, act to promote the “welfare, safety, and morals” of their citizens in this field. Artichoke Joe’s , 353 F.3d at 737 (quotation omitted).
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