44 State AGs Challenge CFTC Authority Over Sports Prediction Markets

Forty-four state attorneys general urge CFTC to withdraw proposed rules, citing lack of statutory power under the Commodity Exchange Act and state jurisdiction over gambling.

Woofun AI reports that attorneys general from 44 U.S. states submitted a joint letter to the CFTC, asserting the agency lacks authority to regulate sports prediction markets. Spearheaded by Ohio Attorney General Andy Wilson, the submission argues that proposed rules exceed statutory powers under the Commodity Exchange Act and violate constitutional limits, emphasizing that states retain primary jurisdiction over gambling and sports betting. The letter recommends the CFTC draft new regulations compliant with both federal law and the Constitution.

This legal challenge coincides with conflicting judicial rulings on platform operations. While a federal judge blocked Minnesota from enforcing its ban on Kalshi and Polymarket, a New York judge refused to halt the state’s application of gambling laws to Kalshi.

Additionally, Michigan and Washington courts recently issued temporary restraining orders or bans against Kalshi’s sports-related contracts. Separately, the NFL urged CFTC Chairman Michael Selig to tighten rules to better protect athletes and consumers.