TLDR The CFTC filed lawsuits against Illinois, Arizona, and Connecticut, claiming exclusive federal jurisdiction over prediction markets and challenging state-level crackdowns on operators like Kalshi. The NFL sent a letter to the CFTC urging prediction market operators to stop listing contracts on officiating, injuries, and other trades susceptible to manipulation. CFTC Chairman Michael Selig said the agency will likely reject injury-related prediction market contracts where players could profit from hurting opponents. The CFTC’s enforcement director warned that insider trading laws do apply to prediction markets, pushing back on claims from finance figures who said otherwise. Tribal gaming leaders used the Indian Gaming Tradeshow to rally opposition against prediction markets, calling them an “existential threat” to tribal gaming sovereignty.
The Commodity Futures Trading Commission made its first legal move against state regulators this week, filing lawsuits against Illinois, Arizona, and Connecticut over their recent actions targeting prediction market operators.
The lawsuits argue that the federal agency has exclusive jurisdiction to regulate event contracts under the Commodity Exchange Act. More than a dozen states have filed legal challenges against prediction market operator Kalshi over the past year.
CFTC Chairman Michael Selig said the states were trying to impose “inconsistent and contrary obligations” on market participants. He argued that Congress rejected a fragmented patchwork of state regulations because it led to weaker consumer protections.
In its 29-page lawsuit against Illinois, the CFTC referenced cease and desist letters that the Illinois Gaming Board had sent to three CFTC-registered designated contract markets. The federal agency said the state regulators “misapprehend” the nature of the contracts.
NFL Engages With CFTC on Market Manipulation Concerns
Separately, the NFL weighed in on the debate by sending a letter to the CFTC on March 29. The league asked prediction market operators to avoid listing what it