44 State Attorneys General Challenge Prediction Markets Over Sports Wagering Concerns

A coalition of 44 state attorneys general, led by Ohio's Andy Wilson, has challenged the Commodity Futures Trading Commission (CFTC), arguing the agency lacks authority to regulate sports prediction markets. While the CFTC views sports contracts as regulated swaps, states contend they constitute sports betting under state jurisdiction. The dispute centers on the CFTC's proposed 'gaming' definition, amid ongoing federal preemption litigation with nine states and conflicting local court rulings.

State attorneys general letter

• ▪A coalition of 44 state attorneys general, led by Ohio Attorney General Andy Wilson, sent a letter to the Commodity Futures Trading Commission on July 27, 2026
• ▪The coalition of 44 state attorneys general argued that the Commodity Futures Trading Commission lacks the statutory power to regulate sports-related event contracts
• ▪Attorneys general representing Florida, Georgia, New Hampshire, Missouri, and Texas did not sign the coalition's letter to the Commodity Futures Trading Commission

CFTC jurisdiction over sports

• ▪Prediction market platform volumes reached new heights in 2026, driven by the popularity of sports-related contracts and the 2026 FIFA World Cup
• ▪The Commodity Futures Trading Commission and prediction market platforms argue that all event contracts are swaps, which are derivatives regulated by the commission
• ▪U.S. states argue that sports-related contracts on prediction market platforms resemble sports betting, which falls under state regulatory jurisdiction

Gaming definition dispute

• ▪Rothera CEO Thomas Chippas supported the Commodity Futures Trading Commission's "gaming" definition, arguing that a definition keyed to wagering would sweep in every event contract
• ▪In June 2026, the Commodity Futures Trading Commission released a draft rule defining "gaming" as a sport itself rather than financial wagering on the sport
• ▪CME Group general counsel Jonathan Marcus argued that the Commodity Futures Trading Commission's definition of "gaming" overreaches by suggesting federal preemption of state sports regulations

Federal preemption litigation

• ▪The Commodity Futures Trading Commission is in litigation with nine states to defend its claim of exclusive jurisdiction to regulate prediction markets
• ▪The Commodity Futures Trading Commission has used federal preemption as an argument in court proceedings to defend its regulatory authority over prediction markets

Conflicting state court rulings

• ▪A federal judge in Minnesota on July 27, 2026, temporarily blocked a statewide ban on prediction markets from taking effect on August 1, 2026
• ▪A Michigan judge in late June 2026 blocked the prediction market platform Kalshi from offering sports bets in Michigan