The Commodity Futures Trading Commission moved on Thursday to intervene in a lawsuit in the U.S. District Court for the District of Rhode Island, seeking to stop the state from applying gambling laws to CFTC-registered contract markets.
The agency said the Commodity Exchange Act gives it exclusive jurisdiction over event contracts traded on designated contract markets and preempts state gambling-law enforcement against those venues.
“This power grab ignores the law and decades of precedent,” CFTC Chairman Michael S. Selig said.
The intervention followed a week of dueling filings. Prediction market operator Kalshi filed a federal suit in Rhode Island on May 21 after a meeting with the state attorney general’s office. The same day, Rhode Island Attorney General Peter F. Neronha sued Kalshi and Polymarket in state court, alleging their sports-related event contracts amounted to unlicensed sports betting. Neronha demanded the platforms “stand down” and “disgorge their profits.”
Rhode Island is the latest state targeted in a broader CFTC campaign. The agency has already filed preemption suits against Arizona, Connecticut, Illinois, New York, Wisconsin, and Minnesota.
