US Regulator Takes New York to Court Over Prediction Market Dispute

In its latest move to assert nationwide regulatory control over prediction market firms, the US Commodity Futures Trading Commission has filed a lawsuit against New York. This action comes after New York recently sued Coinbase and Gemini for allegedly violating state gambling laws with their prediction market contracts, and previously targeted Kalshi over its sports wagering platform. The CFTC argues that federal law grants it exclusive jurisdiction over commodity futures, options, and swaps traded on federally regulated exchanges, thereby preempting state law. However, 37 state attorneys general, including New York's Letitia James, have countered that this stance threatens states' ability to protect their 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 are undermining its authority over prediction markets, while New York officials maintain they are enforcing state laws to protect consumers from gambling violations.