• The CFTC and DOJ collectively sued Illinois, Arizona, and Connecticut on April 2 to dam state cease-and-desist orders towards federally regulated prediction market platforms together with Kalshi, Polymarket, and Robinhood.
  • CFTC Chairman Mike Selig cited unique jurisdiction beneath the Commodity Trade Act, asserting that state regulators had been making an attempt to “subvert federal regulation” by classifying occasion contracts as playing requiring state licences.
  • The federal fits mark the primary direct court docket problem to state prediction market enforcement, as 11 states pursue authorized motion towards platforms and Congress individually debates bans on political insider wagering.

Federal regulators escalated a authorized battle over prediction markets this Thursday, because the Commodity Futures Buying and selling Fee (CFTC) and Division of Justice filed lawsuits towards Illinois, Arizona, and Connecticut to dam state-level enforcement actions towards federally regulated platforms together with Kalshi, Polymarket, and Robinhood.

The filings argue that the CFTC has unique authority over Designated Contract Markets beneath the Commodity Trade Act of 1974. 

The company is looking for court docket orders to cease states from limiting platforms it regulates, warning that continued enforcement would intervene with federal regulation and market stability.

Learn extra: Bitcoin ETFs Snap Outflow Streak with $1.3B Inflows in March

It’s plenty of Lawsuits

The Illinois case names Governor JB Pritzker, Lawyer Common Kwame Raoul, and members of the Illinois Gaming Board. 

The state issued cease-and-desist orders in April 2025 towards Kalshi, Robinhood, and Crypto.com, classifying event-based contracts as playing merchandise requiring state licences. A separate order focused Polymarket in early 2026. The CFTC argues these actions stop federally accepted exchanges from working.

Arizona and Connecticut face related lawsuits tied to their very own enforcement measures. In whole, 11 states are pursuing motion towards prediction market platforms, creating overlapping authorized challenges throughout jurisdictions.

Congress can also be contemplating new restrictions on prediction markets, together with limits on sports-related contracts and bans on buying and selling by political insiders on war-related occasions. These proposals may reshape the sector no matter how courts resolve the federal-state dispute.

Learn extra: Chainalysis Unveils AI Agents to Supercharge Crypto Crime Investigations

The publish CFTC Takes Three States to Federal Court Over Prediction Market Control appeared first on Crypto News Australia.