US CFTC Sues Rhode Island to Maintain Exclusive Jurisdiction Over Prediction Markets

On May 29, the U.S. Commodity Futures Trading Commission (CFTC) announced that it has filed a lawsuit in the U.S. District Court for the District of Rhode Island to prevent the state from applying its gambling laws to CFTC-registered contract markets. CFTC Chairman Michael S. Selig stated that CFTC-registered exchanges are facing numerous lawsuits aimed at restricting Americans' participation in event contracts, which undermines the CFTC's exclusive jurisdiction over prediction markets. Selig emphasized that event contracts are commodity derivatives and fall entirely within the CFTC's regulatory purview. The CFTC is also facing similar jurisdictional challenges in states such as Arizona, Connecticut, Illinois, New York, and Minnesota. The CFTC asserts that the Commodity Exchange Act grants it exclusive jurisdiction over event contracts.