Led by Ohio Attorney General Andy Wilson, the attorneys general of 44 U.S. states sent a joint letter to the Commodity Futures Trading Commission (CFTC) on July 28, saying the CFTC does not have the authority to regulate sports-related event contracts on prediction market platforms. The joint letter asks the CFTC to rewrite its rules, clarifying that sports betting cannot be traded on designated contract markets and should be subject to state legal jurisdiction.
Joint Letter From 44 Attorneys General Argues It Exceeds CFTC’s Statutory Authority
The coalition, led by Ohio Attorney General Andy Wilson, highlighted three points in the letter: the CFTC’s proposed rules go beyond its statutory authority; they conflict with the Constitution; and, in their current form, they appear arbitrary and overbearing. The coalition urged the CFTC to restart the rulemaking process and explicitly state that “sports betting and gambling activities cannot be traded on designated futures contract markets,” which should fall under state law jurisdiction.
The timing of the joint letter closely matched the end of the CFTC’s public comment period for its first prediction market regulatory proposed rule, which concluded on Monday evening. Attorneys general from five states—Florida, Georgia, New Hampshire, Missouri, and Texas—did not sign on.
CFTC’s Regulatory Position: Federal Preemption Argument and the “Gambling” Definition Draft Published in June
The CFTC and prediction market platforms argue that all event contracts are swap contracts (derivative products), which fall within the CFTC’s regulatory scope; the CFTC has already sued 9 states nationwide on the grounds of federal preemption. In June 2026, the CFTC released its first proposed regulatory rule draft for prediction markets, focusing mainly on the controversial sports event contracts, and defining “gambling” as activities intended for entertainment or leisure, where the measurable outcomes obtained from skilled operation during the event process form the basis for the definition. The states, meanwhile, argue that sports-related contracts are too similar to sports betting and fall within the states’ jurisdiction.
CME Group and Rothera Take Different Positions on the “Gambling” Definition
The two market institutions take sharply different positions on the CFTC’s “gambling” definition:
CME Group (Jonathan Marcus, General Counsel): Opposes the CFTC’s definition. In the letter, he said the CFTC defines “gambling” as sports themselves rather than financial bets on sports, showing that the Commodity Exchange Act is overriding state sports regulations—a “clear overreach.” Notably, CME Group is currently also a sports prediction market exchange regulated by the CFTC under FanDuel
Rothera (Thomas Chipas, CEO): Supports the CFTC’s definition. Chipas believes the definition should focus on the activity itself and said the definition should not be tied to “gambling” (financial risk of loss) to ensure it includes all event contracts
FAQ
Why do the attorneys general of 44 states oppose CFTC regulating sports prediction markets?
The joint letter argues that the CFTC’s proposed rules exceed its statutory authority (in violation of the authorization scope of the Commodity Exchange Act), conflict with the Constitution, and use overly forceful wording. These states contend that sports-related contracts are too similar to sports betting, and sports betting has long been within states’ jurisdiction, so oversight should be handled by state law rather than by federal regulatory bodies.
How many states is the CFTC currently in legal disputes with, and which are the 5 states that haven’t signed on?
The CFTC is currently litigating with 9 states nationwide over jurisdiction over prediction markets, defending its exclusive regulatory authority over these platforms on the grounds of federal preemption. The five states not included in the joint letter are: Florida, Georgia, New Hampshire, Missouri, and Texas.
What have court decisions in recent months in different states been regarding prediction markets?
In late June, a court in Michigan barred the Kalshi platform from offering sports betting services in that state; on July 28 (Monday), a federal judge in Minnesota temporarily blocked a ban against prediction markets in that state from taking effect on Saturday—two opposite rulings in the same week. Observers generally believe the Supreme Court will ultimately decide how federal and state jurisdiction are allocated.
