Sports Betting Sites / Play / CFTC adds New York to states targeted in prediction market lawsuits

CFTC adds New York to states targeted in prediction market lawsuits

Legal Writer

Publish Date: Apr 27, 2026

Fact checked by: Matt Moreno

Key Points

The Commodity Futures Trading Commission has sued New York regarding the state’s attempts to restrict prediction market trading.
The CFTC lawsuit seeks an injunction barring New York officials from taking action against licensed prediction market exchanges.
The agency also intervened in a Massachusetts state court case involving prediction markets.

The United States Commodity Futures Trading Commission now has active lawsuits against four state governments pertaining to potential restrictions on prediction market trading within those states’ borders. New York became the fourth such defendant state on Friday.

The Commission’s filing with a federal court is seeking the same action against New York that it has asked courts for in other parts of the country, specifically orders barring any of the state governments from taking action against exchanges that the Commission has licensed. Friday was a busy day for the Commission, as it also made its presence felt in a Massachusetts state court.

New York State House of the Senate

CFTC takes New York to court over cease-and-desist demands, lawsuits

In October, the New York State Gaming Commission sent a notice to Kalshi, demanding that the platform cease and desist what it called “making available an unlicensed mobile sports wagering platform” in the state. On April 21, New York Attorney General Letitia James announced civil actions against Coinbase and Gemini regarding their prediction exchanges.

The Commodity Futures Trading Commission’s (CFTC) April 24 lawsuit in the federal court for the Southern District of New York is the agency’s response to those actions.

As the CFTC complaint points out, the CFTC is the agency that U.S. law has charged with the regulation of commodity futures, derivatives, and “swaps.” Swaps in this context are a form of designated contract market that are predicated on the occurrence, or lack thereof, of a particular future set of circumstances.

The CFTC brief argues that federal law gives it exclusive regulatory powers over platforms like Kalshi. Therefore, New York’s attempt to restrict Kalshi’s operations violates the Supremacy Clause of the U.S. Constitution, the filing claims.

The complaint asks the court for declarations toward that end and for injunctive relief against New York officials taking action against exchange platforms licensed by the CFTC. This action is almost a carbon copy of the CFTC’s lawsuits against other states, which have seen some success.

CFTC seeks to replicate success in Arizona

A statement from the CFTC regarding its lawsuit against New York makes its motivation in suing the state unambiguous. The agency is looking to “build upon ongoing efforts to affirm its exclusive jurisdiction over” prediction exchanges.

In early April, the CFTC lodged similar complaints against Arizona, Connecticut, and Illinois. While litigation is pending in all three cases, a federal judge in Arizona has already granted the commission’s request for an injunction against Arizona officials.

While the litigation initiated by the states in these states plays out, there are concurrent legal actions that platforms like Kalshi took the initiative on. The CFTC got involved in another of those matters on April 24.

CFTC submits amicus brief in Massachusetts state case

In September, Massachusetts Attorney General Andrea Joy Campbell sued Kalshi in the Suffolk Superior Court, similarly alleging that its exchange is an unlicensed online sportsbook operating in violation of the state’s laws. Kalshi responded by asking a federal court for injunctive relief similar to that which the CFTC has sought in the four states it has sued.

However, the federal court remanded the case to the Suffolk Superior Court, which is a decision for which Kalshi had no appeal options. The CFTC took the prerogative to intervene in that dispute on Friday.

According to a CFTC release, it filed an amicus brief in the case, stressing to the court the same arguments that federal laws make it the sole regulator of prediction markets. With hearings fast approaching in the dispute between Kalshi and Massachusetts, the CFTC’s weight has been thrown in Kalshi’s corner.

Courts in multiple parts of the U.S. are all facing decisions about the nature of prediction markets and state sovereignty. The CFTC continues to play an active role in that litigation on multiple fronts.

If you're looking for more news and updates visit our Ballislife Play page.

Play

Which 2026 sweepstakes casino ban makes the most sense for restricting the activity?

To date in 2026, five U.S. states have passed or are very close to passing new laws that restrict the operation of sweepstakes casinos, directly or indirectly banning the activity within their borders. The language of these statutes contains some similarities but there are stark differences in their tenets as ...

by Derek Helling

7 hours ago