Maryland Lottery and Gaming is hoping that a preemption ruling in a legal abortion case will help it win a court case against prediction market operator Kalshi.
The regulator filed a notice in its pending lawsuit with Kalshi over the legality of sports event contracts in the state drawing the judge’s attention to a recent decision in the Fourth Circuit Court of Appeals it felt pertinent to the case.
That case? Whether or not a drug company could offer the abortion drug mifepristone in the state.
They may seem unrelated, but at the heart of both is a discussion and debate about how federal and state laws interplay and a question of whether federal laws preempt state ones.
In the Kalshi case, one of the core arguments put forth by the defending state regulators and associated amicus briefs is that Congress did not empower the Commodity and Futures Trading Commission (CFTC) regulation to usurp the entirety of the gambling industry.
The amicus brief from the group of Attorneys General specifically honed in on this point, noting “there are no elephants in mouse holes” and the law requires more precise language than the special rule regarding the CFTC in the Dodd-Frank Act to confer exclusive wagering oversight to the federal organization.
In the Circuit Court ruling on the West Virginia abortion case, the crux of the decision rested on a very similar conclusion.
The pharmaceutical company GenBioPro argued that the Food and Drug Administration Amendments Act (FDAAA) of 2007 conferred the regulation and control of high-risk drugs like mifepristone to the Food and Drug Administration (FDA). The company contended that the state laws enacted in West Virginia that severely limit abortion, including via mifepristone, encroached on the FDA’s territory.
The West Virginia District Court disagreed, as did the appeals court.
In ithe judgment, the panel noted that West Virginia’s abortion law did not overtly intend to supplant the scope of the entire FDA. Rather, its laws limited something in a way that overlapped slightly with the FDA’s purview.
Additionally, it noted that states have been allocated the ability to regulate beyond what the FDA mandates.
“The text of the FDAAA suggests that Congress intended to create a regulatory floor, not a ceiling. The states are not free to dilute congressional safety measures, but they are free to strengthen them,” the ruling read.
GenBioPro suggested that references to “drug accessibility” scattered throughout the FDAAA meant that the organizations role was not just to safeguard but to guarantee availability. The court’s response to this perhaps ties most directly to the Kalshi cases.
“We think Congress would have spoken with a much clearer voice if it intended to effect such a radical change in the federal-state balance,” the ruling read.
The conclusion really hammered home that point:
“At a time when the rule of law is under blunt assault, disregarding the Supreme Court is not an option. We do not suggest that the FDAAA lacks any preemptive effect. States are certainly not free to dilute federal safety standards where they have been clearly established. Nor do we deny that Congress may preempt state abortion laws if it chooses to do so and acts pursuant to its enumerated powers. We simply hold that it must express that intention with the clarity befitting such a significant alteration to our system of dual sovereignty. Because the FDAAA does not do so, we decline to overturn the West Virginia law.”
The decision was not a unanimous one across the panel of three judges. Judge Rossie D Alston filed a dissenting opinion that agreed in part and disagreed in part, with the crux of the argument centering around the idea that the actions of West Virginia creates additional health care burdens for surrounding states.
This is not the only case that has been flagged for the courts. In the appeal of the New Jersey preliminary injunction keeping Kalshi online pending in the Third Circuit Court, the group behind the tribal amicus brief filed a letter of supplemental authority drawing attention to the Supreme Court ruling in Federal Communication Commission (FCC) v. Consumers’ Research.
That case dealt largely with nondelegation doctrine. In layman’s terms, nodelegation doctrine looks at Congress’s ability to delegate power to regulatory government bodies. This is at the heart of the tribal amicus brief, which claimed the CFTC failed the three-part test to determine the constitutionality of the organization.
https://sbcamericas.com/2025/07/18/maryland-kalshi-mifepristone-ruling-wv/