44 States Challenge CFTC Authority Over Prediction Markets

Led by Ohio Attorney General Andy Wilson, the multi-state group argues the CFTC’s proposed amendments to Rule 40.11 exceed the authority granted by the Commodity Exchange Act. The coalition contends that the federal government lacks the mandate to oversee gambling markets, which have long been governed by state law. This legal pushback arrives as courts across the country issue contradictory rulings regarding the legality of platforms like Kalshi and Polymarket.

While the CFTC maintains that federally listed derivatives fall under its sole jurisdiction, recent judicial outcomes have complicated this stance. In New York, a federal judge recently denied an injunction against state gambling enforcement, signaling that federal authority is not absolute. Conversely, in Minnesota, a judge temporarily blocked the state from enforcing its own ban on prediction markets. Meanwhile, the National Football League has separately pressured the agency to implement even stricter safeguards, highlighting the intense friction between federal regulators, state authorities, and private platforms as they navigate an evolving legal landscape.