Attorneys General in 44 US States Tell CFTC It Lacks Authority Over Prediction Markets

Attorneys general from 44 US states are challenging the Commodity Futures Trading Commission’s authority to regulate prediction markets.

The Block reported on July 29 that the attorneys general, led by Ohio, sent a joint letter to the CFTC on July 27. In the letter, they wrote that the agency’s proposed prediction-market rules “clearly exceed” its authority under the Commodity Exchange Act and urged the CFTC to reconsider the proposal and draft new rules that comply with the Commodity Exchange Act and the Constitution.

The attorneys general argued that the proposal seeks to expand federal regulatory power into an area traditionally overseen by states. States have long regulated gambling, including sports betting, while the federal government has not, they added.

Legal disputes involving prediction-market platforms Kalshi and Polymarket are spreading across the US. On July 27, a US federal district court curbed Minnesota’s effort to ban prediction markets and allowed the platforms to keep operating.

In New York, by contrast, Kalshi’s request to block the application of state gambling law was denied. Earlier court rulings in Michigan and Washington also temporarily barred Kalshi’s sports-related event contracts.