CFTC Expands Lawsuit Campaign to New York Over Prediction Market Regulation

In its ongoing effort to assert nationwide regulatory control over prediction market firms, the US Commodity Futures Trading Commission has filed a lawsuit against New York. This move follows the state's own lawsuit against Coinbase and Gemini, alleging that their prediction market contracts violate state gambling laws. 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, 37 state attorneys general have countered with a legal brief arguing that this stance threatens the states' ability to protect their citizens. CFTC Chairman Mike Selig has prioritized this initiative, with similar lawsuits filed against Arizona, Connecticut, and Illinois. The regulatory body claims that state lawsuits undermine its sole jurisdiction over prediction markets, while New York officials assert that they are enforcing state laws to protect consumers from gambling violations.