North American Derivatives Exchange, Inc., dba Crypto.com | Derivatives North America v. Nevada, et al.

The Commodity Exchange Act (CEA) gives the Commodity Futures Trading Commission (CFTC) “exclusive jurisdiction” to regulate the trading of “swaps” on federally regulated designated contract markets (DCMs). 7 U.S.C. § 2(a)(1)(A). A “swap” is any contract that provides payment “dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence.” Id. § 1a(47)(A)(ii). Given that intentionally sweeping breadth, Congress has given the CFTC tools to clarify and refine the term’s reach. First, Congress has enacted a “special rule” empowering the CFTC to bar trading of certain swaps, including those that “involve … gaming.” Id. § 7a-2(c)(5)(C)(i)(V). Second, Congress has given the CFTC authority to “further define the term[] ‘swap.’” 15 U.S.C. § 8302(d)(1). The Third Circuit holds that the CEA’s plain text gives the CFTC exclusive jurisdiction, preempting state regulation, over trading on DCMs of “sportsevent contracts”—contracts that pay a fixed amount if a sports-related prediction is correct. That’s because sports-event contracts are “swaps” no different from, say, weather swaps. KalshiEX, LLC v. Flaherty, 172 F.4th 220 (3d Cir. 2026). But the Ninth Circuit disagrees, holding that sports-event contracts aren’t swaps, meaning states are free to regulate, ban, and even criminalize them. See KalshiEX, LLC v. Assad, No. 25-7516, 2026 WL 2543846 (9th Cir. Aug. 28, 2026) (published); App. 1a-5a. The question presented is whether the CEA preempts state regulation of sports-event contracts traded on a DCM.