Attorneys general from 44 states have united to demand that the U.S. Commodity Futures Trading Commission withdraw and overhaul its new rule on prediction markets for sports and gaming events. They argue the CFTC is stepping outside its legal boundaries and encroaching on regulatory territory traditionally controlled by states.
The coalition, led by Ohio Attorney General Andy Wilson, submitted a letter on Monday stating the proposed framework exceeds the authority granted to the CFTC under the Commodity Exchange Act. They insist the rule should be rewritten to align with federal law and constitutional limits, warning the agency’s current approach would give it sweeping control over gambling activities without explicit congressional approval.
States Assert Their Role Over Sports Betting
The letter emphasized that sports betting and gambling have long been regulated by individual states rather than the federal government. The attorneys general voiced concern that the CFTC’s proposal could disrupt this balance, imposing federal oversight on a sector with major economic and political significance.
This challenge intensifies amid ongoing legal battles across the U.S. where courts have delivered conflicting rulings on sports prediction markets. The CFTC has maintained that derivatives linked to such events fall under its exclusive jurisdiction, but these states strongly contest that standpoint.
The CFTC’s proposal has already drawn input from sports organizations, exchanges, legal experts, and players in the crypto space, reflecting the high stakes involved. With the public comment period now closed, this pushback from states adds pressure on the regulator to reconsider its path forward.
This article provides information only and does not constitute financial advice.
