State AGs vs CFTC: Prediction Market Regulation Row Escalates

The battle over who regulates prediction markets has intensified, with 44 state attorneys general arguing that the CFTC lacks authority in this area. Led by Ohio Attorney General Andy Wilson, they contend that the proposed rule goes beyond the CFTC's statutory powers and is in tension with the Constitution.

The coalition of states argues that sports betting and gambling contracts should fall under state law instead of federal regulation. They claim that the line between a sportsbook bet and a prediction-market contract is illusory, with platforms functioning as unregulated sportsbooks.

On the other side, the crypto and prediction-market industry has urged the CFTC to finalize a clear federal framework, arguing that a single national standard beats a patchwork of fifty state gambling regimes. The CME Group, a derivatives exchange, broke ranks with the agency by warning that defining 'gaming' as the wager rather than the game could preempt state sports law.