Overview
- The federal agencies filed suits Thursday against Illinois, Arizona and Connecticut to stop state crackdowns on prediction‑market platforms.
- These platforms run markets where people trade contracts on real‑world outcomes, such as sports results or elections, and the CFTC treats those contracts as financial derivatives.
- The agencies argue the event contracts qualify as swaps under the Commodity Exchange Act, which gives the CFTC exclusive jurisdiction and blocks states from using gambling statutes.
- The complaints ask courts to halt cease‑and‑desist efforts and to declare state gambling laws invalid when applied to federally regulated event‑contract markets.
- States have pursued their own actions, with Arizona bringing the first criminal case against Kalshi in March and Nevada winning a preliminary injunction, and the fights now move toward a Ninth Circuit hearing later in April as Congress advances bills to curb election and sports contracts.