Svmuu News: The U.S. CFTC filed a lawsuit against Kentucky on Tuesday in an effort to prevent the state from regulating prediction market platforms as illegal sports betting and gambling platforms, thereby further establishing the federal government’s jurisdiction over prediction markets.
Previously, last week, Kentucky had filed a lawsuit against platforms such as Kalshi and Polymarket, accusing them of operating unlicensed, illegal sports betting and gambling businesses within the state.
In a complaint filed with the U.S. District Court for the Eastern District of Kentucky, the CFTC stated that Kentucky’s attempt to shut down federally regulated designated contract markets interferes with the federal regulatory framework established by Congress for the national derivatives market. The agency asserts that it has “exclusive jurisdiction” over event-based contracts and prediction market products.
Kentucky has become the ninth state the CFTC has sued in disputes over the regulation of prediction markets, indicating that the conflict between federal derivatives regulation and state-level gambling regulation continues to escalate.