Kentucky joins a growing list of US jurisdictions facing legal challenges for attempting to enforce their laws
The Commodity Futures Trading Commission has added Kentucky to the list of states being sued over efforts to enforce state gambling laws on prediction markets.
The CFTC filed suit this week against the Commonwealth of Kentucky and its governor, attorney general and gambling regulator, accusing them of violating the CFTC’s exclusive jurisdiction over event contracts.
“Kentucky is the latest state attempting to shut down federally regulated event contracts,” said CFTC chairman Michael Selig. “Prediction markets provide Kentuckians with valuable information about the likelihood of future events and offer risk management products relied on by Kentucky businesses and individuals.
“As I’ve consistently pledged, the CFTC is firmly committed to maintaining its exclusive jurisdiction over prediction markets, and today’s lawsuit against Kentucky is yet another example of the Commission protecting its federal interests.”
The CFTC is asking the US District Court for the Eastern District of Kentucky to declare that Kentucky state law – as applied to designated contract markets – violates the Supremacy Clause and is therefore pre-empted.
It also seeks a permanent injunction that prohibits Kentucky from enforcing the challenged provisions as applied to CFTC-regulated designated contract markets.
The CFTC has brought similar legal proceedings against Arizona, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin, among others. It has also submitted amicus briefs to the U.S. Court of Appeals for the Sixth and Ninth Circuits as well as the Supreme Judicial Court of Massachusetts.