The U.S. Commodity Futures Trading Commission (CFTC) and Department of Justice filed lawsuits against Arizona, Connecticut, and Illinois. These federal agencies aim to block the states from regulating or shutting down prediction market platforms.
The CFTC claims exclusive federal jurisdiction over these event contracts under the Commodity Exchange Act. The lawsuits respond to state cease-and-desist orders and criminal charges filed by Arizona against platforms including Kalshi.
State regulators maintain that these markets constitute illegal gambling. The CFTC argues that state actions create a fragmented regulatory landscape that undermines the federal framework for derivatives.
The court rulings will define the legal and regulatory future for prediction markets in the United States.