CFTC Pushes Sports Prediction Market Rules as States Sue Over Jurisdiction

On June 10, 2026 the U.S. Commodity Futures Trading Commission issued a 267‑page Notice of Proposed Rulemaking that would permit CFTC‑regulated prediction‑market platforms to list contracts on macro‑level sports outcomes while expressly prohibiting player‑prop and specific‑play wagers. The proposal would bring platforms such as Kalshi and Polymarket under federal oversight, require capital reserves, KYC checks and trade reporting, and open a market estimated at $8‑12 billion annually. A 75‑day comment period has begun.

Two days later, federal regulators, exchange operators and state authorities filed a wave of lawsuits in New York, Kentucky, Nevada and New Mexico. The CFTC sued New Mexico, asserting that Congress granted it exclusive authority over event contracts traded on designated contract markets and that the state cannot apply its gambling laws to those trades. Nevada’s Gaming Control Board asked a court to hold Kalshi in contempt for violating a preliminary injunction that bars sports‑event contracts to Nevada residents. In New York, Nadex sued the state attorney general and gaming commission, arguing federal preemption, while a newly formed Coalition for Fair Markets filed suit in Kentucky challenging that state’s prediction‑market tax. These actions underscore a growing clash between federal jurisdiction and state gambling regulations.