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CFTC Sues Rhode Island Over Prediction Market Enforcement

The Commodity Futures Trading Commission filed suit against Rhode Island on Thursday, escalating a jurisdictional dispute over prediction market regulation. The action follows Rhode Island's attorney general Peter Neronha filing separate claims against Kalshi and Polymarket last week, alleging violations of state gambling statutes through sports-related event contracts. The CFTC contends that federal authority over derivatives and swaps encompasses event contracts, placing prediction markets within its regulatory purview. The agency is seeking to intervene in the state lawsuit while pursuing its own complaint. Rhode Island becomes the seventh state targeted by the CFTC in this regulatory conflict. Nationwide, 18 states are now engaged in litigation over prediction market oversight, with Minnesota pursuing an outright ban. In a Tuesday social media post, President Donald Trump stated that maintaining the CFTC's exclusive jurisdiction over prediction market regulation was critical. The CFTC has only pursued litigation against states whose attorneys general are Democrats.