Trump Administration Seeks to Preempt State Regulation of Prediction Markets
The Federal regulator claims exclusive authority over an industry long regulated by states.
WASHINGTON, May 5, 2026 — The Trump administration is going to court to shield prediction market players Kalshi and Polymarket from state regulation.
The Commodity Futures Trading Commission filed an amicus brief in Massachusetts state court asserting jurisdiction over prediction markets. The CFTC has also filed lawsuits against Arizona, Connecticut, Illinois, New York, and Wisconsin, which have also sought to regulate prediction markets.
The state of Massachusetts sued Kalshi on September 12, 2025, arguing that Kalshi’s “event contracts” closely resemble sports betting, for which Kashi does not have a state license. The lawsuit also claims Kalshi offers bets to users under 21, the state’s age requirement for gamblers. State attorney general Andrea Campbell won a preliminary injunction against Kalshi on January 20, 2026.
“Some states continue to pursue ever-escalating, illegal enforcement actions against CFTC-regulated exchanges, despite rulings from multiple courts halting those efforts,” said CFTC Chairman Michael S. Selig. “Congress has entrusted the CFTC with the sole authority to regulate commodity derivatives markets, including prediction markets. To any state that seeks to nullify federal law and seize authority over these markets, I say again: we will see you in court.”
