CFTC sues Kentucky after state’s prediction market lawsuits
The CFTC sued Kentucky in federal court to stop the state from enforcing its recent lawsuit against prediction market operators. Kentucky had accused Polymarket, Kalshi, and partners Coinbase, Robinhood, and Webull of running unlicensed gambling and sports wagering platforms without a state gaming license. The CFTC says Kalshi and Polymarket are federally regulated designated contract markets and that their event contracts are swaps under federal commodities law, giving the agency exclusive jurisdiction. It also argues Kentucky’s 14.25% excise tax on prediction market fees is meant to make these markets uneconomical in the state. The case is part of a broader CFTC campaign to block state-level actions against prediction markets; Kentucky is the ninth state the agency has sued.
