CFTC sues Arkansas to protect prediction markets

(PRESS RELEASES) -- The Commodity Futures Trading Commission today announced that it has filed a lawsuit against Arkansas to block the state’s attempts to halt event-contract trading and impose up to hundreds of millions of dollars in civil penalties on CFTC-registered exchanges.

Arkansas is bringing a civil enforcement against Kalshi in state court, a CFTC-designated contract market. Arkansas’s efforts to obstruct the functions of CFTC-registered exchanges operating lawfully under the Commodity Exchange Act are preempted by federal law.

“As prediction markets continue to prove their value in being useful for risk management and providing the public with valuable information about the future, Arkansas seeks to shut down event contracts ranging from sports and politics to other important world events,” said Chairman Michael S. Selig. “The CFTC will continue to defend its sole jurisdiction over these federally regulated markets as granted by Congress under the Commodity Exchange Act, and the Commission will not let state interference thwart its regulatory efforts and destroy federally regulated markets.”

Arkansas is the 11th state the CFTC has sued to vindicate federal sovereign interests. The CFTC has also submitted amicus briefs in four federal Courts of Appeal and one state Supreme Court.