Case 2:26-cv-00151 Document 1 Filed 02/23/26 PageID.5 Page 5 of 27
trading, clearing, settlement, surveillance, and enforcement of financial instruments traded in these markets to prevent the type of fragmented oversight” that would result from state enforcement) (citation modified) (emphasis added). 8. Also last week, a federal court in the Middle District of Tennessee granted Kalshi a preliminary injunction barring officials in that state from taking action against Kalshi’s exchange, based on a finding that Kalshi’s contracts—specifically Kalshi’s sports event contracts—are swaps subject to the CFTC’s exclusive jurisdiction. KalshiEX v. Orgel , No. 3:26-cv-00034, 2026 WL 474869, at *7 (M.D. Tenn. Feb. 19, 2026) (“The court finds that Kalshi is likely to succeed on the merits because sports event contracts are ‘swaps’ and conflict preemption applies.”). 9. The Tennessee court was also persuaded that Kalshi would suffer irreparable harm because its constitutional rights were threatened and because “[a]bsent an injunction, Kalshi could either continue its operations in Tennessee and face potential civil and criminal liability” or attempt to comply and risk its position as a national exchange. Id. at *10. The court further noted that Kalshi would be irreparably injured from the “substantial expenses and reputational harm” it would incur from attempting to comply with Tennessee’s unconstitutional demands. Id. at *11. 10. A federal court in the District of New Jersey likewise granted Kalshi’s preliminary injunction in April 2025 to prevent similar state overreach. The court enjoined state officials from attempting to prohibit Kalshi’s event contracts, explaining that it was “persuaded [] Kalshi’s sports-related event contracts fall within the CFTC’s exclusive jurisdiction” and “at the very least field preemption applies” to prevent states from regulating trading on DCMs like Kalshi. KalshiEX LLC v. Flaherty , No. 25-cv-02152, 2025 WL 1218313, at *6 (D.N.J. Apr. 28, 2025). Moreover, the court recognized that even the “express preemption provisions” of 7 U.S.C. § 16 “do[] not foreclose implied preemption elsewhere within the CEA.” Id. at *5. But see KalshiEX LLC v.
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