Shelby determined that the text of the U.S. law clearly indicates that state regulation is not prohibited. U.S. law states that the CFTC’s jurisdiction does not “supersede or limit the jurisdiction vested in the courts of the United States or any other state” and “explicitly provides for state regulation of its gambling laws in all but a few specified cases,” he wrote.
“Congress is aware that some states permit gambling while others do not, and the CEA explicitly provides for state jurisdiction,” Shelby wrote.
In the United States, most states want the Supreme Court to rule
Kalshi is now appealing his loss to the United States Court of Appeals for the Tenth Circuit, but was unable to obtain an injunction preventing enforcement of the state’s gambling ban while this litigation continues. On September 8, the Tenth Circuit judges denied Kalshi’s emergency motion for an injunction pending appeal. Utah sued to shut down Kalshi about six weeks later.
The CFTC’s lawsuit against Utah presents arguments similar to those already rejected by the district court, although other courts have ruled otherwise.
“Utah is not the first state to attempt to encroach on the Commission’s exclusive jurisdiction over swaps,” the CFTC lawsuit says. “Already, several federal courts, including the Third Circuit, have responded quickly by issuing or upholding temporary restraining orders and preliminary injunctions prohibiting states from enforcing their gambling laws against CFTC-regulated exchanges that offer contracts related to sports or other events.”
The Third Circuit Court of Appeals ruled that New Jersey cannot regulate sports betting in prediction markets. But Kalshi lost similar cases in the Sixth and Ninth Circuits in rulings favoring Ohio, Tennessee and Nevada.
Since the circuit courts of appeals are divided on the issue, it is likely that the Supreme Court will take up the case and determine whether states can apply their gambling laws to prediction markets. New Jersey petitioned the Supreme Court to resolve the circuit split, and 39 other states and the District of Columbia filed a brief supporting New Jersey’s petition.
Gn bussni
