CFTC sues New York over prediction markets

(PRESS RELEASE) -- The Commodity Futures Trading Commission filed a lawsuit in the U.S. District Court for the Southern District of New York to halt the State of New York’s efforts to apply state gambling laws against CFTC-registered contract markets.

New York has sought to enforce state laws against CFTC-registered entities through cease-and-desist letters and civil enforcement suits. In its complaint against New York, the CFTC seeks a declaratory judgment that federal law grants it exclusive authority to regulate event contracts and requests a permanent injunction preventing the state from enforcing preempted state laws against its registrants.

“CFTC-registered exchanges have faced an onslaught of state lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets. New York is the latest state to ignore federal law and decades of precedent by seeking to enforce state gambling laws against CFTC-registered exchanges,” said Chairman Michael S. Selig. “As I’ve said before, the CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets.”

The CFTC’s action builds upon ongoing efforts to affirm its exclusive jurisdiction over CFTC-registered designated contract markets that offer trading in event contracts. It follows similar CFTC lawsuits in Arizona, Connecticut, and Illinois.