CFTC sues Kentucky over action against Kalshi and Polymarket
The Commodity Futures Trading Commission continues its attempts to defend prediction platforms from state-level legal action.
US.- The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against the state of Kentucky in try to stop it from intervening against prediction platforms. The move comes after Kentucky Attorney General Russell Coleman filed civil actions against Kalshi and Polymarket, arguing that the companies are operating illegal sportsbooks in the state.
Kentucky also introduced a new transaction fee aimed at such platforms. The CFTC argues that these actions conflict with federal law by interfering with Congress’s decision to give the agency exclusive authority over event contracts and attempting to push federally regulated exchanges out of the state.
CFTC chairman Michael S. Selig said in a statement: “Kentucky is the latest state attempting to shut down federally regulated event contracts. 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.”
Kentucky is the ninth state to be sued by the CFTC, which is also seeking an injunction against Illinois. Twenty states are currently involved in legal or regulatory actions against prediction market platforms. State authorities argue that sports-related event contracts resemble sports betting products and should therefore be subject to state oversight.
Announcing Kentucky’s lawsuit against Kalshi and Polymarket last week, Coleman accused the companies of operating illegal sportsbooks and said their “legal fictions don’t pass the sniff test.” The CFTC claims that event contracts are swaps rather than gambling products and therefore fall under federal jurisdiction.
