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The Commodity Futures Trading Commission moved to intervene in a federal lawsuit on Thursday to block Rhode Island from applying state gambling laws against federally registered prediction market platforms, making it the seventh state the agency has sued in an ongoing jurisdictional dispute.
Last week, Neronha brought suit against Kalshi and Polymarket, contending that the two platforms had run afoul of Rhode Island's sports-betting statutes by offering sports-related event contracts — a legal theory other states have advanced as well, according to CNBC. Neronha also filed a parallel complaint in Providence County Superior Court seeking civil penalties and, in a statement, demanded prediction markets "stand down" and "disgorge their profits."
The CFTC intervened in Kalshi's existing federal lawsuit against the state and filed its own complaint against Rhode Island. The agency argues that the Commodity Exchange Act gives it sole authority to regulate designated contract markets, preempting state laws that purport to do the same.
"CFTC-registered exchanges have faced an onslaught of lawsuits seeking to limit Americans' access to event contracts and undermine the CFTC's sole regulatory jurisdiction over prediction markets. This power grab ignores the law and decades of precedent," CFTC Chairman Michael Selig said in a statement.
