CFTC sues to stop Utah from using state gambling laws to shut down prediction markets

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CFTC has sued Utah, seeking to block the state from taking enforcement action against prediction market platforms such as Kalshi, arguing that federally registered event contract exchanges are subject to the CFTC’s exclusive oversight. Utah, citing its state constitution and gambling ban, maintains that offering such services to state residents is illegal; the dispute also involves proceedings brought by the CFTC against nine other states and conflicting rulings from federal appeals courts. The case will test whether federal derivatives regulation can preempt state gambling enforcement, leaving unresolved the compliance question of whether prediction market platforms are protected by federal registration.