CFTC seeks permanent injunction to block Kentucky gambling tax on event contracts
The Commodity Futures Trading Commission (CFTC) has escalated its federal preemption campaign by filing for a permanent injunction to block Kentucky from enforcing state gambling tax laws against CFTC-registered event-contract platforms, according to a June 18 filing flagged by Gibson Dunn and later detailed by VitalLaw on June 25. The case names major trading platforms including Robinhood, Coinbase, and Webull alongside the CFTC's argument that federal commodity regulations preempt state-level gambling taxation and licensing requirements. The commission's preemption theory, if accepted in the Eastern District of Kentucky, would shield federally regulated event-contract operators from state gambling tax regimes entirely.
Kalshi and Polymarket gain a federal shield in Kentucky if the court accepts CFTC preemption, nullifying state gambling tax exposure in a Republican-led state where both platforms had faced growing enforcement risk.