CFTC seeks permanent injunction to block Kentucky gambling tax on event contracts
The Commodity Futures Trading Commission (CFTC) has filed for a permanent injunction in the Eastern District of Kentucky to block the state from enforcing its gambling tax laws against CFTC-regulated event-contract platforms, according to filings dated June 18 and June 25, 2026. The commission argues that federal commodity regulations preempt Kentucky's state-level taxation and licensing requirements. The case involves major platforms including Robinhood, Coinbase, and Webull. The filing escalates an ongoing federal-state conflict over regulatory authority for prediction markets, with the CFTC seeking to shield federally registered operators from state enforcement actions.
A ruling affirming federal preemption would nullify Kentucky's gambling suit and targeted tax against Kalshi and Polymarket in a single decision. Any loss invites other states to replicate Kentucky's dual-track pressure with copycat statutes.
The CFTC's Kentucky filing becomes its fourth active federal preemption suit alongside parallel cases in New Mexico and Minnesota, as the agency races to establish exclusive jurisdiction before more states enact copycat statutes.