ProphetX argued that the CFTC can pre-empt state action against prediction markets by exempting sports event contracts from Section 4(c) of the CEA, according to the report. The company said prediction markets serve a public-interest function.
The argument concerns whether the CFTC can shield sports event contracts from state-level action.
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The US Commodity Futures Trading Commission has sued New Mexico officials, seeking to block the state from applying gambling laws to event contracts registered under CFTC supervision, according to the report. New Mexico had sued Kalshi on 4 June, alleging that it offered unlicensed sports betting and allowed users aged 18 to 20 to participate. The CFTC argues that the contracts are federally regulated swaps and that Kalshi operates as a designated contract market.
The District Court for Arizona issued a preliminary injunction on 5 May 2026 barring the state from taking criminal or civil action against event contracts traded on CFTC-regulated designated contract markets. The ruling followed Arizona’s prosecution of Kalshi for operating without a state licence and the CFTC and Department of Justice’s challenge to the state’s enforcement.
A court in Arizona granted a federal regulator’s request for a temporary restraining order to block the state’s pursuit of criminal charges against Kalshi, according to a report published on 13 April 2026. The available text says the CFTC supported the request but does not identify the court or provide further terms.
Ohio Governor Mike DeWine said the state will pursue enforcement against more prediction market operators offering sports-related contracts, reported by The Statehouse News Bureau. The Ohio Casino Control Commission has already issued cease-and-desist notices to Kalshi, Polymarket and Robinhood. Two bills would restrict election betting and treat sporting event contracts as regulated, taxable sports gambling.
Governor Mike DeWine has signaled that Ohio intends to take enforcement action against additional prediction market operators that list sports-related contracts, describing those products as violations of state gambling law. According to The Statehouse News Bureau, the governor made clear that the state's response will involve enforcement rather than warnings alone. Cease-and-desist notices have already gone out from the Ohio Casino Control Commission to multiple firms, among them Kalshi, Polymarket and Robinhood.
Underdog has filed suit against Tennessee sports betting regulators to stop them applying state gambling law to its prediction market business. This follows an 9 October cease-and-desist order from the Tennessee Sports Wagering Council, which threatened civil penalties, criminal investigations and revocation of Underdog's fantasy sports licence. Underdog argues the Commodity Futures Trading Commission has exclusive jurisdiction, and Tennessee is the seventh state it has sued, after a Sixth Circuit ruling against Kalshi in September.