Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 14 of 28 PageID: 14
Division’s demands, Robinhood contacted the Division in May and explained that it believed it should be able to reactivate sports-related event contracts trading through Kalshi’s exchange for as long as this Court’s order in KalshiEx remains in effect. Division officials informed Robinhood that they could not agree to refrain from enforcement action even while this Court’s order was in place concerning Kalshi. Robinhood requested a meeting with senior Division officials to discuss the issue further. After several follow-ups by Robinhood, the Division has still not responded to Robinhood’s request for a meeting. E. The CEA Preempts Application of State Gaming Laws to Sports-Related Event Contract Trading on CFTC-Designated Exchanges. 38. Transactions involving sports-related event contracts traded on Kalshi’s designated contract market—regardless of whether the orders come directly to Kalshi from Kalshi’s customers or indirectly to Kalshi from Robinhood’s customers—are subject to the CFTC’s exclusive jurisdiction, and New Jersey law is preempted to the extent it purports to regulate those transactions. 39. The Constitution and laws of the United States “shall be the supreme Law of the Land,” U.S. Const. art. VI, cl. 2, and accordingly, “Congress has the power to preempt state law.” Crosby v. Nat. Foreign Trade Council , 530 U.S. 363, 372 (2000). Federal law can preempt state law expressly, through a statement to that effect in the statute itself, or impliedly, through either field preemption or conflict preemption. Field preemption exists where Congress manifests an intent to occupy exclusively an entire field of regulation. See Fidelity Fed. Sav. & Loan Ass’n v. De la Cuesta , 458 U.S. 141, 153 (1982). Conflict preemption exists where compliance with federal and state law is “a physical impossibility” or when “state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id. (internal quotation omitted).
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