US Regulator Takes New York to Court Over Prediction Market Dispute

In its latest move to assert nationwide regulatory control, the US Commodity Futures Trading Commission has filed a lawsuit against New York, marking the agency's continued efforts to shield prediction market firms from state interference. The lawsuit comes after New York took action against Coinbase and Gemini, alleging their prediction market contracts breached state gambling laws, 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, thereby preempting state law. However, 37 state attorneys general, including New York's Letitia James, have countered that this stance undermines states' ability to protect their citizens. The CFTC's chairman, Mike Selig, has prioritized this initiative, with the agency also suing Arizona, Connecticut, and Illinois over event contracts. In response to the lawsuit, New York officials stated they are upholding state laws on gambling, emphasizing their commitment to protecting consumers and holding accountable platforms that violate these laws.