US Regulator Expands Lawsuit Against States to Protect Prediction Markets

In a recent move, the US Commodity Futures Trading Commission has filed a lawsuit against New York, marking the latest development in its efforts to assert nationwide regulatory authority over prediction market firms. This action follows New York's own lawsuit against Coinbase and Gemini, alleging violations of state gambling laws through their prediction market contracts. The CFTC maintains that federal law grants it exclusive jurisdiction over commodity futures, options, and swaps traded on federally regulated exchanges, thereby preempting state law. However, a coalition of 37 state attorneys general has countered that this stance threatens the states' ability to protect their citizens. The CFTC has also taken similar action against Arizona, Connecticut, and Illinois, arguing that event contracts fall within federal jurisdiction. The regulator's chairman has emphasized the importance of protecting Americans' access to event contracts and upholding the CFTC's regulatory authority over prediction markets. In response, New York officials have stated their commitment to enforcing state gambling laws and holding accountable any platforms that violate them.