Woofun AI reports that the Commodity Futures Trading Commission has initiated legal proceedings against the Commonwealth of Kentucky to enforce federal supremacy in regulating futures markets. This action follows Kentucky’s prior litigation against prediction platforms Kalshi and Polymarket, which the state accused of operating unauthorized sports betting services. In filings with the U.S. District Court for the Eastern District of Kentucky, the CFTC contends that state efforts to restrict these entities infringe upon the exclusive federal regulatory framework established by Congress for national exchange markets.

Furthermore, the agency challenged Kentucky’s imposition of a 14.25% tax on futures transaction fees, asserting that such measures "essentially make it impossible for futures markets to operate in the state."