The Trump administration sued Arizona, Connecticut and Illinois on Thursday, to stop what it called their unlawful efforts to regulate prediction markets because they may violate state gambling laws.
Attempts by states to shut down efforts by companies such as Kalshi, Polymarket, Crypto.com and Robinhood to provide “event contracts” violated the Commodity Futures Trading Commission’s exclusive authority to regulate national swaps markets, the government said.
The lawsuits are the first by the CFTC to block state gaming regulators from policing operators of prediction markets.
It objected to cease-and-desist letters sent to designated contract markets such as Kalshi, Polymarket and Crypto.com, and futures commission merchants such as Robinhood, after regulators found reason to believe they violated state gambling laws by allowing unlicensed sports wagering.
