The fight over who gets to police prediction markets just got a lot more personal. California and Minnesota’s top prosecutors are now openly questioning whether the CFTC, the federal agency that oversees derivatives markets, has any business regulating platforms that, in their view, look a lot more like gambling operations than financial exchanges.
Minnesota Attorney General Keith Ellison put it bluntly on June 18: states understand the social cost of gambling better than a commodities regulator ever could. California’s attorney general echoed that argument, and together they’re building a case that the CFTC is fundamentally the wrong agency for the job.
41 states, one message
This isn’t just two states venting. On April 30, a coalition of 41 bipartisan attorneys general submitted formal comments to the CFTC, arguing that prediction markets function as de facto sportsbooks. Their core claim is straightforward: when someone bets on the outcome of an election or a sporting event through a prediction market, that’s gambling. And gambling regulation has traditionally been the domain of states, not a federal agency designed to oversee corn futures and interest rate swaps.
The attorneys general aren’t just arguing about jurisdictional authority in the abstract. They’re raising a practical concern: the CFTC has no infrastructure, expertise, or mandate to deal with gambling addiction, consumer protection for bettors, or the social externalities that come with widespread access to wagering platforms.
