The Commodity Futures Trading Commission has sued Utah to stop state enforcement efforts against federally registered prediction markets, extending the CFTC’s prediction markets litigation to ten states. Announced on October 27 , the lawsuit argues that Utah’s actions interfere with authority Congress reserved for the federal regulator.
Key takeaways
The CFTC seeks to block Utah’s enforcement against registered markets.
The agency claims exclusive federal oversight of prediction markets.
Related jurisdiction disputes involve nine other states.
A separate CME challenge concerns Kalshi’s Bitcoin perpetual futures approval.
Utah enforcement expands the CFTC’s prediction markets litigation
The Utah lawsuit targets civil enforcement cases the state brought against markets regulated by the CFTC and other businesses. The agency says those actions would limit the operations of federally registered exchanges and seeks to prevent the state from pursuing those restrictions.
Its central argument is federal preemption : the Commission contends that Congress placed these markets under federal supervision, overriding state law. In the agency’s view, Utah’s use of state enforcement powers conflicts with that congressional decision.
Selig defends exclusive federal oversight
The CFTC maintains that Congress gave it sole responsibility for supervising prediction markets. Chairman Michael S. Selig characterized Utah’s enforcement as an attempt to close prediction markets across a broad range of sectors.
Selig said event contracts support both hedging and investment, while giving the public information about potential future events. He also pointed to the Commission’s expertise and its duty to defend its exclusive jurisdiction over commodity derivatives.
The agency said it would defend federal sovereign interests against state challenges to the lawful operation of derivatives exchanges.
Jurisdiction disputes reach ten states
The CFTC’s prediction markets litigation includes nine states besides Utah : Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island and Wisconsin. The Commission has initiated proceedings against each of them over prediction market jurisdiction.
Its announcement also identifies briefs submitted to four federal appellate courts and one state supreme court. The agency describes the Utah action as another part of its effort to preserve exclusive oversight of the prediction markets registered with it.
CME challenges Kalshi’s Bitcoin futures approval
In a separate dispute, CME has opposed the CFTC’s request to dismiss litigation challenging the approval of Kalshi ’s Bitcoin perpetual futures contract. CME submitted its response on October 2 to a federal court in Washington; the contract received Commission approval in May.
CME’s filing drew sharp criticism from Jake Chervinsky, who serves as chief executive officer of the Hyperliquid Policy Center. He argued that it failed to adequately address questions about competitor standing and the Commodity Exchange Act’s zone of interests.
The CME case challenges a specific contract approval, while the Utah lawsuit concerns state enforcement against federally registered markets.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
