to offer its platform to Marylanders and would thereby comply with the CEA’s impartiality requirement. Id. But this court does not see how Kalshi could allow impartial access nationwide when those within Tennessee can only trade with others in the state, who are over 21 years old, and those outside the state cannot trade with those within the state. It is hard to see how a federally regulated nationwide derivatives exchange could function in this way, as the plaintiff argues. (Doc. No. 41 at 12.) Second , even if Kalshi could comply with both state and federal law, Kalshi has shown that state law likely stands as an obstacle to the accomplishment of the CEA’s primary objective: uniform regulation of the derivatives market. F.T.C. v. Ken Roberts Co. , 276 F.3d 583, 591 (D.C. Cir. 2001) (citing Am. Agric. Movement, Inc v. Bd. of Trade , 977 F.2d 1147, 1155–57 (7th Cir. 1992), abrogated on other grounds by Freightliner Corp. v. Myrick , 514 U.S. 280, 287–89 (1995)). As the defendants point out, however, states can share power with the CFTC over activities that lie outside its exclusive jurisdiction. (Doc. No. 34 at 36–37 (citation omitted).) For example, as the Seventh Circuit explained, “common law claims such as negligence, fraud, and breach of fiduciary duty could be brought by futures investors against their brokers” because “claims against brokers ha[ve] ‘little or no bearing upon the actual operation of the commodity futures markets’ and . . . ‘[o]nly in the context of market regulation does the need arise for uniform legal rules.’” Effex Cap., LLC v. Nat’l Futures Ass’n , 933 F.3d 882, 894 (7th Cir. 2019) (quoting Am. Agric. , 977 F.2d at 1156). By contrast, “preemption is appropriate ‘[w]hen application of state law would directly affect trading on or the operation of a futures market.’” Id. (quoting Am. Agric. , 977 F.2d at 1156). That is the case here. State law would directly affect trading on Kalshi by limiting who can trade with whom. Accordingly, Kalshi has shown a likelihood of prevailing on the merits.
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Case 3:26-cv-00034 Document 48 Filed 02/19/26 Page 20 of 25 PageID #: 888
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