The U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against New York on Friday, continuing its efforts to assert its exclusive regulatory authority over prediction markets nationwide.
This action follows New York’s recent litigation against Coinbase and Gemini, accusing them of violating state gambling laws through their prediction market contracts. Last year, the state similarly challenged Kalshi for its sports wagering services.
The CFTC maintains that such matters fall under federal jurisdiction, as it is the designated regulator for commodity futures, options, and swaps on federally regulated exchanges. The agency’s lawsuit in the U.S. District Court for the Southern District of New York argues that state laws are preempted by federal regulations concerning these CFTC-registered markets.
Meanwhile, 37 state attorneys general, including New York Attorney General Letitia James, joined a legal brief in Massachusetts opposing Kalshi’s preemption claims. They argue this stance undermines states’ abilities to protect their citizens under existing law.
Under Chairman Mike Selig, who has prioritized this initiative since assuming leadership four months ago, the CFTC has also pursued similar actions against Arizona, Connecticut, and Illinois. These cases claim that event contracts fall within federal jurisdiction as derivatives instruments.
“CFTC-registered exchanges have faced an onslaught of state lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets,” stated Selig in a press release.