CFTC reasserts its exclusive jurisdiction over event contracts as commodity derivatives amid “onslaught” of lawsuits
The Commodity Futures Trading Commission (CFTC) has intervened in a lawsuit in Rhode Island to halt the state’s efforts to apply state gambling laws against CFTC-registered prediction markets.
The CFTC’s motion to intervene was filed in the US District Court for the District of Rhode Island on Thursday and accuses state officials of usurping the CFTC’s jurisdiction by attempting to enforce state gaming laws against federally regulated exchanges.
The motion to intervene follows the lawsuit brought last week by Rhode Island attorney general Peter Neronha against prediction market platforms Kalshi and Polymarket.
“CFTC-registered exchanges have faced an onslaught of lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets. This power grab ignores the law and decades of precedent,” said CFTC chairman Michael Selig.
“Event contracts allow businesses and individuals to hedge event-driven risks, enable investors to manage portfolio exposure, and provide the public with information about the outcome of future events. These products are commodity derivatives and squarely within the CFTC’s regulatory remit. As I’ve said before, the CFTC has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives, and that’s exactly what we’ll do.”
Despite the CFTC’s assertion that event contracts serve a valuable role in the US financial system, many of the event contracts offered by CFTC-registered prediction market platforms appear to serve no such purpose.
This was highlighted earlier this week when a Google employee was charged with using inside information to place bets on Polymarket.
The employee, Michele Spagnuolo, is said to have made a profit of $1.2 million on event contracts related to the most searched person in 2025, which he knew to be the suspected murderer David Anthony Burke.