CFTC sues Rhode Island over actions against prediction markets

The Commodity Futures Trading Commission announced it would sue Rhode Island on Thursday, a week after the state took action against two prediction market platforms.

This marks the seventh state the CFTC has sued in a dispute over who has the right to regulate prediction markets.

Rhode Island attorney general Peter Neronha sues Kalshi and Polymarket last weekIt’s a claim other states have also made, saying the companies are violating the state’s sports betting laws through sports-related event contracts. But the CFTC argues that its right to regulate these markets falls within the federal agency’s jurisdiction over swaps and derivatives, which include event contracts.

“CFTC-registered exchanges have faced a barrage of lawsuits aimed at limiting Americans’ access to event contracts and undermining the CFTC’s sole regulatory authority over prediction markets,” said CFTC Chairman Michael Selig. Press release announced the case. “This power grab ignores the law and decades of precedent.”

The CFTC is both seeking to intervene in the state’s existing lawsuit against the platforms and has filed its own complaint against Rhode Island.

In total, 18 states are currently filing lawsuits over prediction markets. One of those states, Minnesota, has moved to ban them entirely.

One social media post President Donald Trump on Tuesday said it was critical to preserve the commission’s exclusive jurisdiction over prediction market regulation.

While officials in states involved in legal action over prediction markets are on both sides of the aisle, the CFTC only went after Democratic attorneys general. Neronha, Rhode Island’s attorney general, is also a Democrat.

The Rhode Island Attorney General’s Office could not immediately be reached for comment.

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