44 state attorneys general urge CFTC to abandon sports prediction market oversight
Attorneys general from 44 states urged the CFTC to reconsider its proposed prediction market rules and to stay out of sports prediction markets, according to reports on July 29. The challenge was discussed on 'The Daily Wolf with Scott Melker.' No specific grounds or timing were detailed in the available text. The state coalition marks a broad push to claw back gambling oversight from federal commodity regulators. CFTC-registered platforms Kalshi and Polymarket now face pressure from both sides: state courts stripping preemption and state attorneys general lobbying to shrink CFTC authority. The CFTC must weigh this opposition as it finalizes its event-contract framework.
The 44-state letter turns the CFTC's rulemaking into a tug-of-war over turf rather than a technical exercise. For Kalshi and Polymarket, the stakes are concrete: a CFTC that retreats from sports contracts would leave them state-by-state licensing, a maze no platform has solved. Schwartz's House testimony had framed sports as squarely federal; this coalition answers that the states never ceded the ground.
The platforms' legal teams must now brief Congress as aggressively as they brief courts. A sympathetic House panel could embed the state view in legislation, overriding registration that platforms spent millions to obtain. The CFTC's draft rules, expected soon, will test whether the agency bends or doubles down.
This state coalition deepens the federal-state split dramatized earlier this week when a Morgan Lewis partner defended CFTC jurisdiction in House testimony, pitting the attorneys general against both the regulator and its traditional allies.