U.S. prediction markets regulator issues demand that clashes directly with courts

The U.S. Commodity Futures Trading Commission told regulated prediction-market exchanges they cannot bar customers on a state-by-state basis, setting up a direct conflict with court orders binding firms such as Kalshi. The clash follows a string of state-level cease-and-desist actions and federal rulings that have forced Kalshi to geo-block users in states including Nevada and New Jersey even as it operates under CFTC oversight. The agency’s stance matters because it asserts federal jurisdiction over event contracts at a time when states are separately suing to classify them as gambling. Kalshi has argued that a patchwork of state restrictions undermines a single national market for event contracts. What to watch next is whether the CFTC formalizes the position in rulemaking or enforcement, and how courts weighing state challenges reconcile the competing regimes.