Kalshi asserts that field preemption applies because the text of the CEA makes clear that the CFTC has exclusive jurisdiction over accounts, agreements, and transactions traded on designated contract markets. (Kalshi Mot. p. 14.) This interpretation is supported by the CEA’s purported purpose and drafting history. ( Id. pp. 15 – 17.) The CEA’s comprehensive regulatory scheme further demonstrates an intent to foreclose concurrent state jurisdiction, according to Kalshi. ( Id. pp. 17, 18.) Kalshi also contends that conflict preemption applies. ( Id. pp. 18 – 22.) Congress’s amendments to the CEA in 1974 were intended to bring futures markets under a uniform set of regulations and the Division’s actions conflict with that goal. ( Id. p. 19.) The CFTC had authority to review and determine whether Kalshi’s sports-related contracts are contrary to the public interest but did not act. ( Id. pp. 20, 21.) Kalshi claims that subjecting it to New Jersey law would undermine congressional calibration of force and conflict with the CFTC’s evaluation of the public interest. ( Id. ) Abruptly closing its sports- related contracts could further place Kalshi in tension with CFTC core principles requiring impartial access to trading privileges and reduction of risk of price distortion and market disruption. ( Id. pp. 21, 22.) Defendants counter that the CEA’s exclusive-jurisdiction provision does not cover the sports-related contracts at issue because they are not associated with a potential financial, economic, or commercial consequence and state law still applies to contracts that do not fall within CFTC’s exclusive jurisdiction. (Defs.’ Opp’n Br. pp. 25–27.) Even if the exclusive-jurisdiction provision applies, defendants argue that its purpose was to separate CFTC and Securities and Exchange Commission (SEC) functions. ( Id. pp. 27, 28.) The savings clauses within 7 U.S.C. § 2(a)(1)(A) and reference to state law in the special rule for event contracts evidence intent not to occupy the field. ( Id. pp. 28–31.) Had Congress sought to preempt state law, it would have done so. ( Id. p. 32.)
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