Regulations
By Sydney TheCMO
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Fourth State in Federal Fight. New York joins Arizona, Connecticut, and Illinois in this mess.
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Massachusetts Brief and Broader Strategy. The same day the CFTC filed against New York, the agency dropped an amicus brief in the…
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What Happens Next. Pending court decisions in New York and Massachusetts will probably set the tone for other states.
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The Commodity Futures Trading Commission filed suit against New York this week. The agency wants to stop the state from treating federally registered prediction markets like…
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The lawsuit, dropped in the Southern District of New York, asks for a declaratory judgment confirming federal law trumps state rules here.
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New York joins Arizona, Connecticut, and Illinois in this mess. The CFTC sued those three states earlier in April for similar moves against registered platforms.
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The pattern's pretty clear. States see prediction markets and think gambling. The CFTC sees commodity derivatives under federal jurisdiction.
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Trading volumes for prediction markets jumped sharply in early 2026. Sports event contracts became the biggest flashpoint between state and federal authorities.
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The same day the CFTC filed against New York, the agency dropped an amicus brief in the Massachusetts Supreme Judicial Court. That case, Commonwealth of Massachusetts v.
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Kalshi scored a win at the Third Circuit Court of Appeals in a New Jersey case recently. That decision backed the federal preemption argument, which probably gave the CFTC more…
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But state attorneys general aren't backing down. They see prediction markets on sports and political events as gambling, plain and simple.
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The CFTC's legal strategy seems coordinated across multiple jurisdictions. Filing suits in four states plus an amicus brief in Massachusetts within weeks shows the agency's…
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Kalshi and Polymarket, the two biggest names in this space, face ongoing legal challenges across multiple states now.
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See also: Kalshi Slaps Fines on Congressional Candidates Who Bet on Their Own Races as Blumenthal Pushes CFTC
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Pending court decisions in New York and Massachusetts will probably set the tone for other states. If federal judges side with the CFTC, state regulators might back off.
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