CFTC Sues Arkansas, Defends Federal Jurisdiction Over Prediction Markets

On November 14, according to an announcement by the U.S. Commodity Futures Trading Commission (CFTC), the agency has filed a lawsuit against Arkansas to prevent the state from halting event contract trading and to impose potential civil fines of up to hundreds of millions of dollars on CFTC-registered exchanges.

The CFTC stated that Arkansas is bringing a civil enforcement action in state court against its designated contract market, Kalshi, arguing that the state's obstruction of federally registered exchanges' operations is preempted by federal law. CFTC Chairman Michael S. Selig said the Commission will defend Congress's grant of exclusive jurisdiction over these markets to the Commission under the Commodity Exchange Act.

According to the announcement, Arkansas is the 11th state sued by the CFTC to uphold federal interests.