On April 24, 2026, the U.S. Commodity Futures Trading Commission sued New York, asserting exclusive federal jurisdiction over prediction market contracts, a central development in CFTC prediction markets regulation and federal preemption. New York had sued Coinbase and Gemini earlier that week, alleging their prediction market contracts violated state gambling laws. Separately, 37 state attorneys general signed onto a legal brief in related Kalshi litigation arguing that preemption threatens states’ ability to protect citizens.
The CFTC argues that federal law designates it as the agency with exclusive jurisdiction over the regulation of commodity futures, options, and swaps traded on federally regulated exchanges, including CFTC-registered designated contract markets. The agency asserts that event contracts qualify as derivatives within federal jurisdiction and that those instruments therefore fall under its statutory authority. The CFTC has initiated lawsuits in multiple states, including Arizona, Connecticut and Illinois, advancing those legal claims. The filings frame those actions as efforts to apply federal derivatives law to event and prediction market contracts offered on registered platforms.
The commission asserts sole regulatory authority over prediction markets as it responds to numerous state suits challenging the markets and the exchanges that list them. “CFTC-registered exchanges have faced an onslaught of state lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets.” The agency has said its enforcement and litigation program is intended to protect nationwide regulatory coverage for firms offering prediction and event contracts. The CFTC maintains that federally regulated exchanges and CFTC-registered designated contract markets fall within its jurisdiction when listing and trading such contracts.
New York has taken a strong stance against prediction markets that it alleges contravene state gambling laws. Recently, the state filed lawsuits against Coinbase and Gemini, claiming their prediction market contracts violated these laws. Previously, New York targeted Kalshi for its sports wagering platform, indicating ongoing efforts to regulate such activities within its borders.
Letitia James and Kathy Hochul, prominent New York officials, have emphasized the state’s commitment to upholding its gambling regulations, viewing them as essential consumer protections. In response to the federal legal challenges, they stated, “Once again, this administration is prioritizing big corporations over consumers and New Yorkers’ best interests. New York’s gambling laws are designed to protect consumers, whether they are placing bets in a prediction market or a casino. When gambling platforms, including prediction markets, violate our laws, we will not hesitate to hold them accountable. We look forward to continuing to defend our laws in court.”
New York remains firm in defending its jurisdiction over gambling activities, positioning consumer protection at the forefront of its regulatory framework.
The legal conflict centers on the CFTC’s assertion of exclusive federal jurisdiction over prediction market and event contracts and the states’ application of gambling laws to those same platforms. The dispute has produced federal enforcement actions and state lawsuits — including New York’s suits against Coinbase and Gemini and earlier action against Kalshi — and remains active as both sides pursue litigation.
