Forty-four states oppose CFTC event contracts proposal
Forty-four states have opposed a CFTC proposal on event contracts, escalating the fight over whether state gambling laws or federal commodity regulations govern prediction-market products. The opposition deepens a split between federal and state courts on whether the Commodity Exchange Act preempts state gambling laws.
The state opposition lands while Kalshi, Polymarket, Robinhood, Crypto.com, and Coinbase face active state gambling enforcement without a federal preemption shield. Courts in Wisconsin, Michigan, Washington, and New Mexico have already rejected CFTC preemption claims. New York filed a $36 billion suit. Each additional state filing multiplies legal spend and forces market-by-market geofencing.
Traders holding contracts they bought under CFTC registration face sudden voiding risk where state courts rule against the platform. The CFTC's proposed public-interest framework offers no relief; it would raise federal barriers while states attack from below. Platforms must now fight on two fronts: shape federal rules that may not survive, and build state-by-state compliance floors that did not exist when they launched.