The Commodity Futures Trading Commission sued Kentucky on Tuesday to stop the state from using its own laws to shut down federally registered prediction markets. The suit widens a campaign the agency has now pressed against a string of states.
The CFTC filed a Complaint for Declaratory and Injunctive Relief in federal court Tuesday afternoon, the agency said. The action follows Kentucky's move to bring civil enforcement cases in state court against CFTC-regulated designated contract markets, the venues where event contracts trade, seeking large monetary penalties from them. Kentucky also created a new special transaction fee on those CFTC-regulated markets to push them to leave the state, according to the CFTC. The agency argues that effort obstructs Congress's decision to federally preempt state law.
CFTC Chairman Michael S. Selig confirmed the filing on his official X account, quote-posting the agency's announcement. "Today's lawsuit against Kentucky is yet another example of the Commission protecting its federal authority," he wrote.
In the press release, Selig framed the dispute around access rather than enforcement. "Kentucky is the latest state attempting to shut down federally-regulated event contracts," he said. "Prediction markets provide Kentuckians with valuable information about the likelihood of future events and offer risk management products relied on by Kentucky businesses and individuals."
