CFTC and DOJ sue states to defend prediction markets as circuit split heads toward Supreme Court

The CFTC is actively defending prediction market platforms against state-level restrictions in multiple jurisdictions. The commission backed Kalshi in an Ohio jurisdictional dispute and sided with the platform against 38 attorneys general in a Massachusetts appeal, according to recent filings. In April, the CFTC and Department of Justice jointly sued New York over prediction market regulations. These actions come as federal courts issue conflicting rulings on state versus federal oversight authority. The U.S. Court of Appeals for the Third Circuit recently ruled in Kalshi's favor on whether event contracts constitute swaps. With circuit splits emerging, legal observers say the Supreme Court could take up a prediction market jurisdiction case as early as 2027. CFTC Chair Michael Selig, who took office a few months ago, has made blocking state restrictions a priority.