CFTC Sues New York Over Authority on Prediction Markets

The CFTC filed suit against New York, claiming sole regulatory power over prediction markets.

The Commodity Futures Trading Commission (CFTC) on April 24, 2026, filed a lawsuit against the State of New York. The agency asserts that it alone has regulatory authority over prediction markets and seeks to stop New York from enforcing its gambling laws against CFTC-registered entities.

• This move follows recent lawsuits by New York Attorney General Letitia James against Coinbase Financial Markets and Gemini Titan. James alleges the platforms are running unlicensed gambling operations and is seeking $2.2 billion from Coinbase and $1.2 billion from Gemini.
• The CFTC's actions are part of a series, with similar lawsuits filed against Arizona, Connecticut, and Illinois, aiming to confirm federal supremacy in the regulation of these platforms.
• Judicial precedent is emerging: on April 6, 2026, a federal appeals court ruled against New Jersey’s attempt to oversee the Kalshi prediction market, siding with the CFTC’s exclusive control. (Guardian)

Michael S. Selig, CFTC Chairman, stated, "The CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets." New York’s AG Letitia James countered, "Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution."

This high-stakes dispute comes as prediction market volumes soar—$44 billion in 2025, projected to reach $325 billion in 2026.

The outcome may fundamentally shape the compliance landscape for fintech platforms and the boundaries between federal and state oversight.