The U.S. Commodity Futures Trading Commission is suing Utah to protect prediction market firm Kalshi’s ability to offer betting in the state, where gambling is constitutionally banned. It is the latest in a string of federal court actions by the agency, which argues it alone regulates prediction markets.
Kalshi (Credits: CoinDesk)
CFTC Sues Utah to Shield Kalshi Prediction Markets
The CFTC has added Utah to its lengthy list of court actions against states in its ongoing effort to defend its position as the lone regulatory authority over Kalshi and other prediction market firms. The agency is asking a federal court to halt the Utah attorney general’s enforcement effort from last week, which was meant to restrict Kalshi from offering gambling to residents in the state.
Gambling is illegal in Utah, and the state has been pursuing a legal effort to halt Kalshi’s offerings there. Utah has so far prevailed against Kalshi in federal court — but now the federal agency itself is weighing in with its own lawsuit, the CFTC said on Tuesday.
Why the CFTC Says Prediction Markets Are Federal Territory
CFTC Chairman Mike Selig defended the agency’s stance in a statement, saying event contracts do not just serve hedging and investment purposes — they also provide the public with information about the outcome of future events. The agency argues its federal authority over derivatives preempts state gambling law when it comes to prediction markets.
The Utah case is one of more than a dozen legal actions the CFTC has pursued to protect what Selig sees as its sole power over prediction markets. The outcome could shape how prediction markets operate across the United States, particularly in states where gambling remains banned or heavily restricted.
For now, the fight between federal regulators and state authorities continues — with Kalshi’s business in Utah hanging on the court’s decision.
Also Read: Robinhood Says Bitcoin, Gold Prediction Markets Are Surging as Traders Move Beyond Sports
Source: CoinDesk — read the full story there.
