Federal Government Sues States Over Prediction Market Regulation
The Trump administration has initiated legal proceedings against three states—Illinois, Connecticut, and Arizona—asserting that the federal government, specifically the Commodity Futures Trading Commission (CFTC), holds exclusive authority over the regulation of prediction markets. These lawsuits challenge state-level attempts to classify prediction markets like Kalshi and Polymarket as gambling operations, which has sparked a debate over whether these platforms constitute financial instruments or unregulated betting, with billions of dollars at stake weekly.
By Isabel Allende