for early access to the latest igaming videos!
and get the latest igaming news first!
The Commodity Futures Trading Commission filed a lawsuit against the state of New York and took measures in a Massachusetts court case on Friday, continuing its legal offensive in the prediction markets. On April 24, the federal government and the CFTC filed a complaint in the U.S. District Court for the Southern District of New York against defendants that included Attorney General Letitia James, New York Governor Kathy Hochul, and the commissioners and leaders of the New York State Gaming Commission (NYSGC).
In general, the CFTC’s arguments are similar to those it made in lawsuits it filed against Arizona, Connecticut, and Illinois, as well as what businesses like Kalshi and Crypto.com have been saying in court complaints across the nation: the court should decide that the CFTC’s federal authority over event contracts overrules state gaming laws. The CFTC requests that the court issue a permanent injunction against the officials in New York.
The battlefield of New York prediction markets
The DOJ and the CFTC cite two significant events as the reason for the legal action.
In October 2025, Kalshi received a cease-and-desist notice from the NYSGC, which claimed that the company’s sports contracts are unlawful sports betting without a state gaming license. In return, Kalshi filed a federal lawsuit against New York officials almost immediately. Then, only last week, the state of New York filed a lawsuit against Coinbase and Gemini in an attempt to get permanent injunctions that would prevent the businesses from providing trading on sports, elections, and other contracts.
One of the states that has been most vocal in criticising the expansion of sports prediction markets is New York. Previously, NYSGC Chair Brian O’Dwyer recommended that the regulator take a close look at whether gaming licensees should be permitted to operate in the state’s sports betting market if they provide prediction markets, in addition to the C&D and the Coinbase and Gemini litigation. In the meantime, Gov. Hochul and AG James have both made negative public remarks about prediction markets.
Response of New York officials to the CFTC lawsuit
The CFTC said that New York’s regulatory and legal activities constituted an overreach by state authorities in a federally controlled field, just like in Arizona, Connecticut, and Illinois. In a statement published in a CFTC press release, CFTC Chairman Michael Selig stated, “CFTC-registered exchanges have faced an onslaught of state lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets.” “By attempting to apply state gambling laws against CFTC-registered exchanges, New York is the most recent state to disregard federal law and decades of precedent. “The CFTC will not permit excessive state governments to undermine the agency’s longstanding authority over these markets, as I have previously stated.”
Hochul and James criticised the federal government for “prioritising big corporations over consumers” in a Friday statement. The Governor and Attorney General wrote, “New York’s gambling laws are designed to protect customers, whether they are placing bets in a casino or a prediction market.” “We won’t think twice about holding gambling platforms, including prediction markets, accountable for breaking our laws. We are eager to keep defending our laws in court.”
The CFTC is still listed as a “friend” of prediction markets
James, along with 37 other attorneys general from both parties, filed a “friend of the court” brief in the Supreme Judicial Court of Massachusetts last week, pleading with a judge to uphold a January decision that gave that state a preliminary injunction against Kalshi. As it did in Crypto.com’s dispute with Nevada in the U.S. Court of Appeals for the Ninth Circuit in February, the CFTC has also submitted a brief in that case.
At last, the actions in New York and Massachusetts represent the most recent escalation of Selig’s interpretation of the CFTC’s strategy to take the dispute over jurisdiction to the courts in its attempt to defend its registered prediction markets companies, even as Congress and other observers continue to question him about the agency’s position on event contracts.
Source: sbcamericas.com
