CFTC prediction-market rules reach White House review as Rhode Island fights in court
The Commodity Futures Trading Commission submitted two prediction-market rules to the White House for procedural review. The move comes while Rhode Island fights Kalshi and Polymarket in court over sports betting jurisdiction. Neither the content of the proposed rules nor the specific claims in the Rhode Island litigation were disclosed. States continue pressing in court over whether event contracts fall under federal derivatives law or state gambling law.
The CFTC is trying to reinforce federal jurisdiction while its preemption shield crumbles in state courts. Ohio and Tennessee have already ruled Kalshi's sports contracts subject to state gambling laws, and New York is suing Polymarket on the same theory. If the White House-reviewed rules define event contracts as swaps with exclusive federal jurisdiction, they could slow the state-by-state bleed.
But rulemaking takes months, and state attorneys general are filing faster. Kalshi and Polymarket now spend on three fronts: federal rule comments, state court defense, and product redesign to satisfy CFTC warnings. The first platform to lose another major state case becomes the template every other state copies, geofencing national markets before any rule or cert grant arrives.