CFTC Sues New York Over Prediction Markets, Takes Legal Action in Massachusetts

• The Commodity Futures Trading Commission has sued New York over its prediction market actions and filed an amicus brief in the Massachusetts Supreme Judicial Court
• The CFTC filed its New York lawsuit in response to legal action taken by the state’s Attorney General against prediction markets
• The filed amicus brief reaffirms the CFTC’s exclusive jurisdiction over prediction markets

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The Commodity Futures Trading Commission is suing New York and has filed an amicus brief in Massachusetts to reaffirm its jurisdiction over prediction markets.

The CFTC today announced it has filed a lawsuit in the U.S. District Court for the Southern District of New York in response to the state’s recent attempts to enforce state laws to prohibit sports event contracts from being traded. Additionally, it filed an amicus brief in Massachusetts, as part of its broader strategy “to protect its jurisdiction over prediction markets from an ongoing campaign of state encroachment.”

“Some states continue to pursue ever-escalating, illegal enforcement actions against CFTC-regulated exchanges, despite rulings from multiple courts halting those efforts,” CFTC Chairman Michael S. Selig said in a press release. “Congress has entrusted the CFTC with the sole authority to regulate commodity derivatives markets, including prediction markets. To any state that seeks to nullify federal law and seize authority over these markets, I say again: we will see you in court.”

Taking Action in New York

The CFTC’s decision to file a lawsuit in New York stems from the New York State Gaming Commission sending several cease-and-desist orders to prediction market operators over the past year and New York Attorney General Letitia James recently suing both Coinbase and Gemini for offering sports event contracts in the state.

“CFTC-registered exchanges have faced an onslaught of state lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets. New York is the latest state to ignore federal law and decades of precedent by seeking to enforce state gambling laws against CFTC-registered exchanges,” Selig said in a release. “As I’ve said before, the CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets.”

The CFTC joined prediction market company Kalshi in taking action against the state. The company filed its own lawsuit against the state in October 2025, filing against members of the New York State Gaming Commission just two days after the regulatory body sent a cease-and-desist letter to the prediction market company on Friday, Oct. 24.

Attorney General James last week sued both Coinbase and Gemini for allegedly offering illegal sports betting in the Empire State. James is seeking a court order for both companies to pay fines, forfeit illegal profits, and pay restitution to customers for using their services.

According to court documents, the New York Attorney General’s Office is seeking a minimum of $1.2 billion in damages against Gemini and $2.2 billion in damages against Coinbase.

James noted in the lawsuits that both companies do not have a license from the New York State Gaming Commission, allowing them to avoid an obligation to pay taxes like licensed casinos and online sports betting platforms.

The companies, she reports, also allow users between 18 and 20-years-of-age to access their markets, despite New York law requiring a person must be at least 21 to participate in online sports betting.

The lawsuits also allege that Gemini and Coinbase both violate New York law that prohibits betting on games in which New York college teams participate.

Filing a Brief in Massachusetts

The CFTC filed its amicus brief in the commonwealth’s ongoing lawsuit against Kalshi. The brief outlines the history and structure of the Commodity Exchange Act (CEA) and describes how the act designed by Congress preempts state laws as applied to CFTC-regulated markets.

The CFTC previously filed an amicus brief before the U.S. Court of Appeals for the Ninth Circuit, arguing that state laws are preempted by the CEA.

Companies such as Robinhood and Kalshi believe that state regulatory bodies do not have the right to intrude on the government’s “exclusive” authority to regulate prediction market, filing lawsuits in New Jersey, Nevada, and Maryland to defend its practices. These companies believe the CFTC is the only regulatory body that can legally block contracts from being offered to customers.

State gaming regulators maintain the markets need to be beholden to regulations, taxes, and license fees that sports betting and gaming operators are required to follow.

Despite several court decisions blocking states from pursuing unlawful enforcement actions against @CFTC-regulated exchanges, some states are still trying to encroach on the @CFTC's exclusive authority over prediction markets.

Massachusetts, we'll see you in court.…

— Mike Selig (@ChairmanSelig) April 24, 2026