US Regulator Sues New York to Block State-Level Crackdown on Prediction Markets

In its latest move to assert nationwide regulatory authority, the US Commodity Futures Trading Commission has filed a lawsuit against New York, seeking to prevent the state from interfering with prediction market firms. This development comes after New York took legal action against Coinbase and Gemini, claiming their prediction market contracts breached state gaming laws. The CFTC maintains that federal law grants it exclusive jurisdiction over commodity futures, options, and swaps, thereby preempting state law. However, 37 state attorneys general have countered that this stance undermines states' ability to protect their citizens. The CFTC has also sued other states, including Arizona, Connecticut, and Illinois, arguing that event contracts fall under federal jurisdiction. The regulator's chairman, Mike Selig, has made this initiative a priority since taking office. In response, New York officials stated that they are enforcing state laws to protect consumers from gambling violations, asserting that they will hold accountable any platforms, including prediction markets, that breach these laws.