According to BlockBeats, on July 29, the attorneys general of 44 U.S. states jointly sent a letter to the U.S. Commodity Futures Trading Commission (CFTC), arguing that the CFTC has no authority to regulate the sports prediction market and urging it to withdraw its current proposed rules and draft new rules that comply with the Commodity Exchange Act (CEA) and the U.S. Constitution.
The letter points out that sports betting has long been regulated by individual states, and the CFTC's proposed rules would significantly expand federal regulatory authority beyond its legal mandate. Recently, the CFTC has been embroiled in legal disputes in several states with prediction market platforms such as Kalshi and Polymarket over the regulatory authority over sports event contracts.
Currently, courts in different U.S. states have differing opinions on this matter. A Minnesota court this week temporarily blocked the enforcement of a ban on prediction markets, allowing Kalshi and Polymarket to continue operating during the litigation; while a New York court again refused to block the enforcement of local gambling laws against Kalshi. Michigan and Washington states had previously restricted Kalshi from providing sports prediction contracts.