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, seeking to protect its regulatory oversight of prediction market firms. This comes after New York targeted cryptocurrency exchanges Coinbase and Gemini, as well as Kalshi, for allegedly violating state gambling laws with their prediction market contracts. The CFTC argues that federal law grants it exclusive jurisdiction over commodity futures, options, and swaps, thereby preempting state law. However, 37 state attorneys general, including New York's Letitia James, have countered that this stance threatens the states' ability to safeguard their citizens. The CFTC's chairman, Mike Selig, has made this a key initiative, with similar lawsuits filed against Arizona, Connecticut, and Illinois. The regulator claims that state lawsuits are attempting to limit access to event contracts and undermine its authority over prediction markets. New York's Attorney General and Governor have responded, stating that they are enforcing state laws to protect consumers from gambling violations, and will continue to defend these laws in court.