The U.S. Commodity Futures Trading Commission sues three states, claiming exclusive regulatory authority over prediction markets.

Odaily Planet Daily News: On Thursday, the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Department of Justice filed separate lawsuits against Illinois, Connecticut, and Arizona, as well as their gambling regulators, seeking federal regulatory authority over prediction markets.

In 2025, the three states and their gambling regulators sent cease-and-desist letters to prediction market platforms such as Kalshi and Polymarket, arguing that the event contracts offered by the platforms violate each state’s gambling laws and licensing requirements. In all three lawsuits, the CFTC argues that, under the Commodity Exchange Act, it has exclusive jurisdiction over “designated contract markets,” including prediction market platforms. The lawsuit against Illinois points out that the state’s gambling commission classified the event contracts as “bets” or “sports betting,” which the commission says is an act beyond its authority.

CFTC Chairman Mike Selig said that the states’ actions beyond their authority have led to market uncertainty and pose potential risks to market participants and registered entities. So far, 11 states have taken legal action against prediction market platforms, while lawmakers are pushing legislation to ban sports-related event contracts and restrict political insiders’ participation in war-related prediction markets.