Key facts
- CFTC alleges Utah cannot use state law to regulate Kalshi.
- Utah sued Kalshi last week, claiming it operates an illegal gambling business.
- This is the CFTC's tenth lawsuit against a state over prediction market regulation.
- The CFTC argues Utah's actions restrict the functioning of CFTC-registered exchanges.
The Commodity Futures Trading Commission (CFTC) sued Utah officials on Monday, escalating a regulatory battle over prediction markets. The federal agency argues that Utah cannot apply state law to regulate Kalshi, a prediction market platform, as such entities are exclusively overseen at the federal level. Utah had initiated its own lawsuit against Kalshi the previous week, asserting the company operates as an illegal gambling business within the state, a claim Kalshi disputes. This marks the CFTC's tenth such legal action against a state. The CFTC, under Chair Michael Selig, maintains that prediction market companies are federally regulated financial exchanges solely under its jurisdiction, while state officials contend they are gambling platforms subject to state oversight. New Jersey officials have petitioned the Supreme Court to weigh in on the regulatory question.