CFTC sues Kentucky to block state crackdown on prediction markets
The Commodity Futures Trading Commission sued Kentucky on June 23, 2026, to block the state from enforcing actions against federally regulated prediction markets. CFTC Chairman Michael S. Selig said Kentucky is the latest state attempting to shut down prediction markets operating under federal oversight. The suit escalates a growing conflict between state and federal regulators over jurisdiction of event-contract platforms. The CFTC argues its comprehensive federal regulatory scheme preempts Kentucky law as applied to event contracts traded on federally regulated exchanges. The commission is fighting to defend what it views as its exclusive authority to regulate event contracts.
Kalshi and Polymarket must now defend Kentucky accounts from both state gambling suits and federal preemption litigation. Any adverse ruling on either front risks forcing both platforms to geofence Kentucky while their CFTC registration is tested in court.
Becomes the ninth state where the CFTC has asserted federal preemption over prediction markets, following actions against platforms in other jurisdictions.