CFTC chairman Michael Selig promises similar action against any state that attempts to pre-empt its authority
The Commodity Futures Trading Commission (CFTC) has initiated legal action in Massachusetts and New York to preserve its authority to regulate prediction markets.
The CFTC filed two lawsuits on Friday, the first in the US District Court for the Southern District of New York to halt the state’s efforts to apply state gambling laws against CFTC-registered prediction markets.
The CFTC seeks a declaratory judgment that federal law grants it exclusive authority to regulate event contracts and requests a permanent injunction preventing New York from enforcing preempted state laws against its registrants.
This follows the lawsuit filed last week by New York Attorney General Letitia James, who is suing prediction market providers Coinbase and Gemini Titan for operating illegal gambling businesses in the state.
“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,” said CFTC chairman Michael Selig. “New York is the latest state to ignore federal law and decades of precedent by seeking to enforce state gambling laws against CFTC-registered exchanges.
“As I’ve said before, the CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets.”
The CFTC’s second legal action was the filing of an amicus brief in support of Kalshi in Massachusetts, where the company faces similar charges of operating an unlicensed gambling business.
The filing in Massachusetts seeks to confirm the CFTC’s exclusive jurisdiction over the US commodity derivatives markets, including event contract markets.
“Some states continue to pursue ever-escalating, illegal enforcement actions against CFTC-regulated exchanges, despite rulings from multiple courts halting those efforts,” said Selig.
“Congress has entrusted the CFTC with the sole authority to regulate commodity derivatives markets, including prediction markets. To any state that seeks to nullify federal law and seize authority over these markets, I say again: we will see you in court.”
Massachusetts’ regulated online sports betting market generated gross win of $227.2 million in the first quarter of 2026, earning the Commonwealth betting tax of $44.4 million.
Massachusetts is looking to attract new licensees to its regulated online sports betting market and recently opened a one-month window for operators to register their intent to apply for new sports betting licenses.
New York’s regulated online sports betting brought in revenue of $643.7 million in the first quarter and earned the state betting tax of $328.3 million.