Key Highlights
The CFTC sued Arizona, Connecticut, and Illinois, arguing that the states are interfering with the agency’s exclusive jurisdiction over federally regulated prediction markets.
The cases target state actions against platforms including Kalshi, Polymarket, Crypto.com, and Robinhood, with Arizona also pursuing a criminal case against Kalshi.
The lawsuits mark a major escalation in the fight over whether prediction markets should be treated as federally regulated event contracts or state-regulated gambling products.
The Commodity Futures Trading Commission has filed lawsuits against Arizona, Connecticut, and Illinois, seeking to block those states from enforcing gambling and gaming laws against federally regulated prediction market platforms. In a press release issued on April 2, the CFTC said the cases were filed to reaffirm its exclusive jurisdiction over these markets under federal law.
The lawsuits challenge actions taken by state regulators against companies, including Kalshi, Polymarket, Crypto.com, and Robinhood. In Arizona, the dispute goes further: Attorney General Kris Mayes filed criminal charges against Kalshi in March, accusing it of running an illegal gambling business.
The CFTC’s position is that Congress gave the agency sole authority over these contracts through the Commodity Exchange Act, meaning states cannot apply their own gambling rules to CFTC-regulated venues. Reuters reported that the federal government is asking the courts to stop what it sees as conflicting state enforcement that undermines federal supervision of the market.
This is the clearest federal push yet to defend prediction markets against state-level crackdowns. The jurisdiction fight has been building for months, with Reuters reporting in February that the CFTC had already argued in court filings that it holds exclusive authority over these markets.
