44 U.S. state attorneys general challenge CFTC oversight of sports event contracts

Attorneys general from 44 U.S. states submitted a comment letter urging the CFTC to withdraw and rewrite its proposed rule for sports-related prediction market contracts, arguing the agency is trying to regulate an area long overseen by states. Led by Ohio Attorney General Andy Wilson, the coalition said the proposal exceeds the CFTC’s authority under the Commodity Exchange Act, conflicts with constitutional limits and would improperly extend federal oversight into gambling. The filing landed as the public comment period closed on proposed amendments to Rule 40.11, which would create a formal review process for event contracts tied to gaming and other sensitive categories. The dispute is unfolding alongside uneven court rulings on Kalshi and Polymarket, with Minnesota temporarily blocking enforcement against the platforms while New York, Michigan and Washington have allowed or imposed restrictions under state gambling law. North Carolina has taken the opposite approach, passing legislation that recognizes the CFTC’s exclusive authority over prediction markets and allows federally registered platforms to operate there from Jan. 1, 2027, with a 6% tax on trading fee revenue from state residents. The comment record has also drawn input from sports leagues and market participants, including the NFL, which recently asked the CFTC to strengthen safeguards around sports contracts rather than loosen them.