A federal commission on Wednesday announced lawsuits against three states over its ability to exclusively regulate prediction markets.
The Commodity Futures Trading Commission said it was taking Arizona, Connecticut and Illinois to court over what it described as the states’ actions “against” contract markets that were registered with the organization.
CFTC has the “exclusive” authority to oversee event contracts through the Commodity Exchange Act, the commission said in a release. But the organization said it found various states trying to outlaw or hamper activities of designated contract markets that are operating in accordance with the law.
Congress has granted the CFTC — rather than individual states — the sole authority to regulate these markets, the body said.
“This is not the first time states have tried to impose inconsistent and contrary obligations on market participants,” CFTC Chairman Michael S. Selig said in a statement. “But Congress specifically rejected such a fragmented patchwork of state regulations because it resulted in poorer consumer protection and increased risk of fraud and manipulation.”
