First , Kalshi is likely to prevail on an impossibility argument. Under the CEA, a DCM “must provide its members . . . with impartial access to its markets and services, including . . . [a]ccess criteria that are impartial, transparent, and applied in a non-discriminatory manner.” 17 C.F.R. § 38.151(b), (b)(1). As the court discussed above, Tennessee requires that bettors be at least 21 years old and “physically located in” Tennessee. Tenn. Code Ann. § 4-49-111. Kalshi argues that, if it were required to comply with Tennessee law, it would need to create a Tennessee-only exchange, on which those wishing to place bets from within Tennessee could only trade against other people in Tennessee, and those elsewhere could not bet with people in Tennessee. This, the plaintiff argues, would violate the CEA’s impartiality requirement. (Doc. No. 7 at 26.) The defendants argue that the purpose of the impartial access rule was to ensure fairness to participants regardless of “economic means,” not geographic location. (Doc. No. 34 at 38 (citing Core Principles and Other Requirements for Designated Contract Markets , 75 Fed. Reg. 80572 (proposed Dec. 22, 2010)).) This may be so, but the defendants have pointed the court to no caselaw stating that the purpose of CFTC’s impartiality requirement, as promulgated, so limits its application. The defendants rely on the opinion of the District of Maryland, which denied Kalshi’s motion for a preliminary injunction, in part because it found that Kalshi had not shown a likelihood of success on a conflict preemption theory. ( See Doc. No. 34 at 38 (citing Kalshi D. Md. , 937 F. Supp. 3d at 686).) In relevant part, that court was not persuaded by Kalshi’s impartiality argument. Kalshi Md. , 937 F. Supp. 3d at 686 (“To the extent Kalshi is arguing that Maryland’s gaming laws prevent it from complying with the impartial access principle by not allowing it to offer sports- event contracts to Marylanders unless it were to obtain a license, the Court rejects that argument.”). The court concluded that Kalshi need only obtain a Maryland sports gambling license to allow it
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Case 3:26-cv-00034 Document 48 Filed 02/19/26 Page 19 of 25 PageID #: 887
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