CFTC Sues Kentucky Over State Action on Prediction Markets

The U.S. Commodity Futures Trading Commission has filed a federal lawsuit against the state of Kentucky, seeking to block the state's enforcement of its gaming laws against federally regulated prediction markets. The lawsuit, filed on Tuesday, June 23, 2026, marks the ninth state the derivatives regulator has sued in a widening legal battle over jurisdiction.

The CFTC's action is a direct response to a lawsuit Kentucky filed on June 17 against prediction market platforms Kalshi and Polymarket, as well as partners Coinbase, Robinhood, and Webull. The state alleged those entities were offering sports wagering without a Kentucky gaming license and failing to comply with state consumer protection rules, including providing resources for gambling addiction.

In its complaint, the CFTC argues that Kalshi and Polymarket are designated contract markets under its authority and that the event contracts they offer are swaps regulated under federal commodities law. It contends that Coinbase, Robinhood, and Webull are registered futures commission merchants permitted to offer such contracts. The agency asked the court for declaratory and injunctive relief to stop Kentucky's enforcement efforts.