US Regulator Takes New York to Court Over Prediction Market Dispute

In its latest move to assert nationwide authority, the US Commodity Futures Trading Commission has filed a lawsuit against New York, following the state's efforts to curb prediction market firms under state gaming laws. This development comes after New York recently took action against Coinbase and Gemini, alleging their prediction market contracts breached state gambling regulations, and previously targeted Kalshi over its sports wagering platform. The CFTC maintains that federal law grants it exclusive jurisdiction over commodity futures, options, and swaps, thereby preempting state law. However, a coalition of 37 state attorneys general, including New York's Letitia James, has countered this stance, arguing that such preemption threatens the states' ability to safeguard their citizens. The CFTC, under Chairman Mike Selig, has made this a key initiative, also suing Arizona, Connecticut, and Illinois over similar issues. Selig emphasized that the agency is protecting Americans' access to event contracts and its regulatory jurisdiction over prediction markets. In response, New York officials stated they are upholding state gambling laws designed to protect consumers, whether in prediction markets or casinos, and will hold accountable any platforms violating these laws.