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. This action aims to protect the agency's authority over prediction market firms, which it believes is exclusive and not subject to state regulation. The lawsuit follows New York's recent actions against Coinbase, Gemini, and Kalshi, alleging violations of state gambling laws. The CFTC argues that federal law grants it sole jurisdiction over commodity futures, options, and swaps, including those traded on federally regulated exchanges. However, 37 state attorneys general have countered that this stance undermines their ability to safeguard citizens. The CFTC Chairman has made this initiative a priority, and similar lawsuits have been filed against Arizona, Connecticut, and Illinois. The regulator claims that state lawsuits are attempting to limit access to event contracts and undermine its authority. In response, New York officials stated that they are enforcing state laws to protect consumers from gambling violations, and they will continue to defend these laws in court.