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The Trump administration sued Kentucky on Tuesday over the state’s recent push to rein in prediction markets.
The Commodity Futures Trading Commission (CFTC), which argues it has exclusive jurisdiction over the platforms, brought the case after Kentucky Attorney General Russell Coleman (R) sued Kalshi and Polymarket last week.
“Kentucky is the latest state attempting to shut down federally-regulated event contracts,” CFTC Chair Michael Selig said in a statement. “Prediction markets provide Kentuckians with valuable information about the likelihood of future events and offer risk management products relied on by Kentucky businesses and individuals.”
“As I’ve consistently pledged, the CFTC is firmly committed to maintaining its exclusive jurisdiction over prediction markets, and today’s lawsuit against Kentucky is yet another example of the Commission protecting its federal interests,” he continued.
Kentucky is the ninth state to face a lawsuit from the agency. The CFTC accused the Bluegrass State of improperly targeting the platforms and attempting to “intrude on the exclusive federal scheme Congress designed to oversee” these markets.
Coleman sued Kalshi and Polymarket last Wednesday, accusing the two major prediction markets of operating illegal sportsbooks and violating state laws.
“These multi-billion dollar corporations and their legal fictions don’t pass the sniff test,” Coleman said in a statement at the time. “As one of our state legislative leaders said it best, ‘If it looks like a duck and quacks like a duck…’”
Kentucky also enacted an excise tax on the platforms earlier this year that drew the ire of the CFTC.
The agency began ramping up efforts to assert its jurisdiction over prediction markets following Selig’s confirmation as chair late last year. In February, Selig announced he would challenge any state that attempted to regulate the platforms.
This endeavor has split Republicans, a dynamic on display with Tuesday’s lawsuit against Kentucky. It marks the first time the CFTC has sued a state with a GOP attorney general.
Selig received a key showing of support late last month, when President Trump weighed in, declaring it “critically important” for the agency to have exclusive authority of prediction markets.
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