US Regulator Takes New York to Court Over Prediction Market Dispute

In its latest move to assert nationwide authority over prediction market firms, the US Commodity Futures Trading Commission has filed a lawsuit against New York. This action follows the state's earlier lawsuits against Coinbase, Gemini, and Kalshi, alleging violations of state gambling laws. The CFTC claims 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 that this stance threatens their ability to protect citizens. The CFTC has also sued other states, including Arizona, Connecticut, and Illinois, arguing that event contracts are derivatives within federal jurisdiction. The regulator's chairman, Mike Selig, has made this initiative a priority, stating that CFTC-registered exchanges face an onslaught of state lawsuits seeking to limit access to event contracts and undermine the CFTC's regulatory authority. In response, New York officials have emphasized their commitment to enforcing state laws on gambling, prioritizing consumer protection and holding accountable platforms that violate these laws.