Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 20 of 28 PageID: 20
impliedly preempts the field of commodity futures and swaps trading, including event contracts trading, on designated contract markets. 52. In addition to express or implied field preemption, conflict preemption exists here with respect to the determination of which event contracts are permitted on CFTC- designated exchanges. As noted above, the special rule relating to CFTC review of event contracts vests the CFTC with the power to approve or prohibit certain event contracts. 7 U.S.C. § 7a-2(c)(5)(C)(i); 17 C.F.R. § 40.11(a)(1)-(2). If the Division were permitted also to make a determination about whether event contracts on a CFTC-regulated exchange were permitted, there would be a direct conflict between federal and state regulation because the CFTC has already impliedly approved those same event contracts. See Crosby v. Nat. Foreign Trade Council , 530 U.S. 363, 380 (2000) (conflict preemption exists where state law “undermines the congressional calibration of force” and is “at odds with achievement of the federal decision about the right degree of pressure to employ”); De la Cuesta , 458 U.S. at 153 (conflict preemption exists where “state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” (internal quotation marks omitted)). Here, the CFTC has determined to allow Kalshi’s sports-related event contracts by taking no action in response to Kalshi’s self-certification of those contracts, making them legal under federal law, but the Division has threatened to preclude trading of those same event contracts by enforcing New Jersey gambling laws. The conflict is clear. Further, it would be incorrect to say that there is no actual conflict here because the contracts would only be precluded if they are offered by an entity that does not have a New Jersey sports wagering license; Robinhood cannot seek a New Jersey sports wagering license and comply with both federal and state regulations because it is not a casino or race track, N.J.S.A. § 5:12A-11. See De la Cuesta , 458 U.S. at 153 (conflict
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