A leading trading platform competes for regulatory authority over prediction markets: CFTC vs State Governments

【Crypto World】Who should have the regulatory authority over prediction markets? This issue has recently escalated to the courts. A major exchange decided to take direct action by filing a lawsuit in federal court against the regulatory agencies of Connecticut, Illinois, and Michigan. Their core argument is clear — they believe that the prediction markets they plan should be governed solely by the U.S. Commodity Futures Trading Commission (CFTC), rather than being subject to state gambling laws.

The company’s legal team stated that this move aims to clarify one thing: whether prediction markets are classified as futures products or as gambling. From a regulatory perspective, these two classifications are fundamentally different.

From the platform’s perspective, they hope that the CFTC’s exclusive jurisdiction can make the final decision. After all, if each state judges independently, it could lead to a chaotic situation of multiple overlapping regulations — Connecticut has one set of rules, Illinois has another, Michigan jumps in as well. Such a scenario would make it impossible for prediction markets to operate smoothly.

The outcome of this case could influence the future development of the entire prediction market ecosystem in the United States. For practitioners and investors, the certainty of the regulatory framework is becoming increasingly important.