US Regulator Takes New York to Court Over Prediction Markets Dispute

In its latest move to assert nationwide regulatory control, the US Commodity Futures Trading Commission has filed a lawsuit against New York, seeking to prevent the state from interfering with prediction market firms. This action follows New York's recent lawsuits against Coinbase, Gemini, and Kalshi, alleging violations of state gambling laws. The CFTC argues that federal law grants it exclusive jurisdiction over commodity futures, options, and swaps, thereby preempting state law. However, 37 state attorneys general, including New York's Letitia James, have countered that this stance threatens their ability to protect citizens. CFTC Chairman Mike Selig has made this initiative a priority, with similar lawsuits filed against Arizona, Connecticut, and Illinois. The regulator claims that state lawsuits undermine its authority and limit Americans' access to event contracts. In response, New York officials assert that they are enforcing state laws to protect consumers from gambling violations, and will continue to defend their laws in court.