Federal government fights states' regulation of prediction markets
AP News • • general
Key Points:
- The federal government has sued Connecticut, Arizona, and Illinois over their attempts to regulate prediction market operators like Kalshi and Polymarket, arguing that these companies fall under federal, not state, jurisdiction.
- The states have issued cease and desist orders, accusing the companies of illegal online gambling, with Arizona also filing criminal charges against Kalshi for violating state gambling laws and election betting prohibitions.
- The Commodity Futures Trading Commission (CFTC) asserts exclusive regulatory authority over these markets, warning against fragmented state regulations that could increase fraud risks and harm consumer protection.
- Connecticut's Attorney General criticized the federal government's stance, calling it a repetition of rejected industry arguments and affirming the state's commitment to enforcing its gambling laws to protect consumers.
- This legal conflict follows previous federal support from the Trump administration for prediction market operators and could have broader implications for the regulation of sports betting.
