Kentucky becomes the ninth state in prediction market regulation disputes prosecuted by the CFTC

According to Odaily, the US CFTC filed a lawsuit against the state of Kentucky on Tuesday, seeking to prevent the state from regulating prediction market platforms as illegal sports betting and gambling platforms, further establishing the federal government’s jurisdiction over prediction markets.

Previously, Kentucky had filed lawsuits against platforms such as Kalshi and Polymarket last week, accusing them of operating unlicensed illegal sports betting and gambling businesses within the state.

In the complaint submitted to the US District Court for the Eastern District of Kentucky, the CFTC stated that Kentucky’s attempt to shut down federally regulated designated contract markets interfered with the federal regulatory system established by Congress for the national swaps market. The agency asserted its “exclusive jurisdiction” over relevant event contracts and prediction market products.

Kentucky has become the ninth state sued by the CFTC in prediction market regulatory disputes, indicating that conflicts between federal derivatives regulation and state level gambling regulation continue to intensify.