CFTC sues Utah to block action against prediction markets
The US state filed a lawsuit against Kalshi last week, seeking to recover up to $60 million in profits related to event contracts on prediction markets.
The US Commodity Futures Trading Commission (CFTC) has filed a lawsuit against the state of Utah in an attempt to block its actions against prediction markets. Utah's attorney general plans to sue Kalshi, a prediction market platform, and its affiliates for up to $60 million in profits allegedly obtained illegally. The CFTC claims that Utah is attempting to circumvent federal law by restricting the functioning of CFTC-registered exchanges.
The CFTC argues that the event contracts targeted by Utah are "swaps" under the federal Commodity Exchange Act and that the exchanges offering these contracts are CFTC-regulated Designated Contract Markets (DCMs). Kalshi's spokesperson, Jacki McGavick, asserts that as a national derivatives market overseen by the CFTC, Kalshi is subject to federal law and no single state should have the authority to veto it.
This legal dispute between federal and state authorities over prediction markets may ultimately be decided by the Supreme Court, as similar cases are pending in other states.
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