"The CFTC will continue to safeguard its exclusive regulatory authority over these markets and defend market participants against overzealous state regulators. Congress rejected such a fragmented patchwork of state regulations because it led to increased risk of fraud and poor consumer protection."
"These contracts are plainly unlicensed illegal gambling under time-worn state law, and we will aggressively defend Connecticut's commonsense consumer protection laws."
The federal government has filed a lawsuit against Connecticut, Arizona, and Illinois, challenging their regulation of prediction market operators. These states issued cease and desist orders, claiming illegal online gambling activities. Arizona has also charged Kalshi with violating state gambling laws. The Commodity Futures Trading Commission asserts its authority over these companies, arguing against state regulations. The Trump administration supports the operators, while Connecticut's Attorney General defends state consumer protection laws against federal claims.
Read at Fortune
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