- The CFTC has sued New York to prevent state gambling laws from being applied to federally regulated prediction markets.
- Thirty-seven states have filed an amicus brief supporting Massachusetts against Kalshi, arguing federal law does not override state gambling authority.
- States are increasing enforcement actions, with New York recently suing Coinbase and Gemini over their offerings.
The Commodity Futures Trading Commission (CFTC) filed a lawsuit against New York this week, escalating a major federal-state clash over who controls prediction markets. In a complaint, the CFTC argued it has exclusive authority and seeks to block the state’s enforcement actions.
CFTC Chair Michael Selig stated, “CFTC-registered exchanges have faced an onslaught of state lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets.” However, state officials forcefully reject this federal preemption argument. A coalition of 37 states and Washington, D.C. filed a legal brief urging Massachusetts’ highest court to reject Kalshi‘s claim that federal law allows nationwide sports betting.
The states argue the 2010 financial law was never intended to legalize sports wagering. Consequently, they contend that removing state oversight would weaken critical consumer protections like age limits and fraud prevention. Meanwhile, state crackdowns on prediction platforms are intensifying across the country.
New York recently filed suits against Coinbase and Gemini, claiming their products violate state gambling rules. Similarly, a Nevada judge extended a ban preventing Kalshi from offering event-based contracts, siding with regulators who view them as unlicensed gambling.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
