Massive Jurisdictional Crisis Over Prediction Markets in the US: 44 States Declare War on the CFTC
44 state attorneys general in the U.S. have launched a major legal battle against federal authority, questioning the Commodity Futures Trading Commission’s (CFTC) jurisdiction over sports prediction markets.
A serious jurisdictional crisis is unfolding in the United States between the federal government and state administrations over sports prediction markets. Led by Ohio Attorney General Andy Wilson, 44 state attorneys general sent a stern letter to the CFTC on the final day of the public comment process, arguing that the agency has exceeded its jurisdictional boundaries. This move, combined with the involvement of sports giant NFL, has plunged the future of prediction markets into great uncertainty.
The attorneys general stated that under the Commodity Exchange Act, the CFTC lacks the authority to regulate sports betting, an area that has historically remained under state sovereignty. Meanwhile, the NFL, in a letter to agency chairman Michael Selig, called for restrictions, claiming these markets fail to protect game integrity and consumers. The federal authority’s claim of “exclusive jurisdiction” directly clashes with the states’ established regulatory rights.
Conflicting Court Decisions and Legal Uncertainty
While the legal process continues, opposing decisions from Minnesota and New York have deepened the market chaos. A federal judge in Minnesota halted the state’s ban on prediction markets, allowing platforms like Polymarket and Kalshi to continue operations. However, on the same day in New York, a judge once again rejected a request to block the enforcement of state gambling laws against Kalshi.
Facing similar hurdles in Michigan and Washington states, Kalshi is struggling to offer contracts based on sports events. This legal turmoil directly affects user access in the U.S., particularly for crypto-based prediction markets, and future regulatory processes. This power struggle between the CFTC, established in 1975 and whose seal is shown in the image, and traditional state gambling regulations represents a critical turning point for digital asset markets.