Federal Regulator Challenges States Seeking to Restrict Prediction Markets
According to the CFTC, federal law gives the agency exclusive jurisdiction over event-based contracts, and it is asking a federal court to stop New York from enforcing state gambling law against those markets.
Fact Check
The claim is strongly supported by the official CFTC source, Release Number 9218-26. That release explicitly states that on April 24, 2026 the CFTC filed suit in the U.S. District Court for the Southern District of New York, sought to stop New York from applying state gambling laws to CFTC-registered contract markets, requested a declaratory judgment confirming the CFTC's exclusive federal authority over event contracts, and sought a permanent injunction against state enforcement. CoinDesk's report is consistent with the CFTC release and adds context that New York had recently pursued enforcement against prediction market offerings. The core claim therefore matches the primary source closely.
Summary
The CFTC told the U.S. District Court for the Southern District of New York that federal law gives it exclusive authority over event-based contracts and sued to block New York from enforcing state gambling laws against those markets. The filing sharpens an ongoing federal-state dispute over whether prediction markets are federally supervised products or state-regulated gambling. The new report also adds that New York previously sued Coinbase and Gemini and ordered Kalshi to stop offering some sports-related contracts.
Terms & Concepts
- event-based contracts: Contracts whose value depends on the outcome of a specified event, such as an election, economic release or sports result.
- Prediction markets: Markets where participants trade on the outcome of future events, often raising legal questions over whether they are financial products or gambling.
- exclusive jurisdiction: Sole legal authority granted to a regulator or court over a particular subject matter, limiting intervention by other authorities.