The U.S. Commodity Futures Trading Commission sued New York on Friday, the latest move to protect what the agency says is its undisputed nationwide regulatory authority over prediction market companies.
Earlier this week, New York state sued Coinbase and Gemini, claiming their prediction market contracts violated state gambling laws. Last year, the state similarly targeted Kalshey to halt its sports betting platform.
The U.S. Commodity Futures Trading Commission, the federal derivatives regulator, has taken the position that states have no authority to interfere with these companies. The agency’s lawsuit, filed in the U.S. District Court for the Southern District of New York, says federal law “designates the CFTC as a federal agency with ‘exclusive jurisdiction’ over commodity futures, options and swaps traded on federally regulated exchanges,” including those designated contract markets registered with the CFTC. Depending on the synchronized stance of regulators and the growing industry they seek to protect, state laws are effectively being preempted.
But also on Friday, 37 state attorneys general, including New York Attorney General Letitia James, signed a legal brief in a Kalsch legal battle in Massachusetts, arguing that “Calsy’s aggressive preemption doctrine threatens states’ long-standing ability to protect the region’s citizens.”
In what CFTC Chairman Mike Selig has called one of the most prominent moves since taking over the agency four months ago, his agency has similarly sued Arizona, Connecticut and Illinois, claiming that active contracts are derivatives within federal jurisdiction.
“Exchanges registered with the CFTC face a series of state lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets,” he said in a statement.
James and New York Gov. Kathy Hochul said in statements late Friday that they were enforcing state laws on gambling.
“This administration has once again put big companies before the best interests of consumers and New Yorkers. New York’s gambling laws are designed to protect consumers, whether they bet on prediction markets or at a casino. When gambling platforms, including prediction markets, violate our laws, we will not hesitate to hold them accountable. We look forward to continuing to defend our laws in court.”
Update (April 25, 2026 01:20 UTC): Added James and Hochul statements.
