Whose interventions in prediction markets have teeth: states or the federal government? It matters because Kalshi is receiving state and federal directives that totally contradict one another. On July 31, New York Governor Kathy Hochul and Attorney General Letitia James announced that their state was suing the prediction market Kalshi for allegedly running an illegal gambling operation. “Kalshi has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,” Hochul said in a press release. Well, on Tuesday, the U.S. Commodity Futures Trading Commission (CFTC) said in a press release it had “ordered the exchange to continue to operate.” Prediction markets have strong—and ever strengthening—ties to the world of cryptocurrencies, and the chair of the CFTC, Mike Selig, has not hidden the fact that crypto is his top priority as head of the commission. New York has, according to the release, “no business” regulating what the CFTC considers federally regulated financial markets. “The Commission is required by law to ensure order in these markets, and that is what we have done today.”