CFTC sues Rhode Island to block state gambling enforcement against prediction markets
The CFTC filed suit on May 28, 2026 to block Rhode Island from enforcing state gambling laws against event contract platforms, arguing the Commodity Exchange Act grants the agency exclusive and preemptive jurisdiction. The filing escalates an ongoing federal-state conflict over prediction market oversight. Rhode Island Attorney General Peter Neronha had previously sought a court declaration that sports event contracts on platforms like Kalshi constitute illegal bets. The CFTC's action in Rhode Island follows its parallel lawsuit against Minnesota and Gov. Tim Walz and comes as multiple states challenge whether federally regulated event contracts can be treated as gambling under state law.
A federal preemption win here arms the CFTC's parallel challenges in Minnesota and Wisconsin while deflecting Pennsylvania's separate opposition filing. Kalshi gains institutional backing it lacked when suing Ohio alone last October.
Brings to four the states where the CFTC has directly intervened against state-level resistance after Minnesota, Tennessee, and the tribal cases, as the agency attempts to construct a federal-preemption firewall before state-court rulings can harden into binding precedent.