Federal Agency Sues New York Over Prediction Market Ban
The CFTC is suing New York to prevent state gambling laws from blocking federally registered prediction market exchanges.Summary
The Commodity Futures Trading Commission (CFTC) has filed a lawsuit in the Southern District of New York to stop the state from enforcing gambling laws against federally registered prediction market exchanges. The agency seeks a declaratory judgment to confirm federal preemption and a permanent injunction against state actions targeting CFTC-registered designated contract markets.
New York becomes the fourth state, following Arizona, Connecticut, and Illinois, in the CFTC's legal battle to protect its exclusive jurisdiction over commodity derivatives. The CFTC argues that the Commodity Exchange Act preempts state laws, and that Congress has granted the agency sole authority over markets including prediction markets.
This legal conflict comes as prediction markets like Kalshi and Polymarket gain mainstream traction, with trading activity increasing and integration into platforms like Google Finance. The upcoming rulings in New York and Massachusetts will be critical in determining the regulatory landscape for this rapidly growing industry.
(Source：BeInCrypto)