Commodity Exchange Act

A coalition of 44 state attorneys general sent a letter to the CFTC, arguing the agency lacks authority over sports prediction markets and urging it to draft new rules consistent with the Commodity Exchange Act.

A New York federal judge denied Kalshi's request to block state regulators from enforcing gambling laws against prediction markets, ruling that federal law does not preempt state regulation. The judge cited a provision in the Commodity Exchange Act and New York's historical interest in regulating gambling. Governor Kathy Hochul and Attorney General Letitia James celebrated the decision as a consumer protection victory.

A federal judge denied Kalshi's request to block enforcement of New York gambling laws against the company's sports-event contracts, ruling that these laws are not preempted by the federal Commodity Exchange Act.

The Commodity Futures Trading Commission (CFTC) faces a lawsuit from the Chicago Mercantile Exchange (CME) over approving Kalshi's request to list perpetual futures contracts. The CME argues the CFTC's expedited approval without public input violates the Commodity Exchange Act and allows unregulated trading of perpetual contracts, which are typically classified as swaps under the Dodd-Frank Act.

Kalshi has added required employment verification for some prediction market bets. The CFTC is considering its first regulation for prediction markets, focusing on contracts involving activities like terrorism, war, or unlawful conduct. Recent arrests over 'insider trading' on topics ranging from military operations to Google Search data have increased regulatory scrutiny.

A Google security engineer was charged with using confidential search trends to profit $1.2 million on Polymarket. He faces federal charges including violating the Commodity Exchange Act, wire fraud, and money laundering. The DOJ and CFTC are involved, and Google has placed him on leave.