Supporting Kalshi's Federal Registration Exemption from State Gambling Laws

Kalshi's federal registration with the Commodity Futures Trading Commission (CFTC) as a designated contract market should exempt it from state gambling regulations. The Commodity Exchange Act grants the CFTC exclusive jurisdiction over derivatives trading on federally regulated exchanges, aiming to create a uniform regulatory framework across the United States. Allowing state laws to override this federal framework could lead to a fragmented regulatory environment, potentially stifling innovation and growth in the prediction market industry. Kalshi's operations are transparent and subject to federal oversight, which includes stringent reporting and compliance requirements. Therefore, enforcing state gambling laws against Kalshi could set a precedent that undermines the federal regulatory structure and creates uncertainty for other federally regulated entities.