Polymarket · US Congress · New York · The Block
Kentucky becomes latest state sued by CFTC over prediction markets
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Kentucky has become the latest battleground in the fight over prediction markets after the Commodity Futures Trading Commission sued the state as part of its push to establish federal oversight of the industry.
Key facts
- Over the past year, the agency has also brought complaints against Wisconsin, Illinois, Arizona, Connecticut, New York, New Mexico, Minnesota and Rhode Island
- Prediction platforms like Kalshi and Polymarket have surged in popularity following the 2024 election cycle, where people can make bets on things like political elections and which team will win
- Kentucky’s attempts to shut down federally regulated DCMs [designated contract markets] intrude on the exclusive federal scheme Congress designed to oversee national swaps markets," the CFTC said
- In the complaint against Kentucky, the CFTC criticized a bill passed by its legislature that requires prediction markets to pay a tax of 14.25% on transaction fees
Summary
On Tuesday, the derivatives regulator sued the state over what it says it has "exclusive jurisdiction" over, after the state originally sued Kalshi, Polymarket and others last week for allegedly operating unlicensed, illegal sports betting and gambling platforms in the state. "Kentucky’s attempts to shut down federally regulated DCMs intrude on the exclusive federal scheme Congress designed to oversee national swaps markets," the CFTC said in the complaint filed in the U.S. District Court for the Eastern District of Kentucky. Kentucky is now the ninth state to be sued by the CFTC. Over the past year, the agency has also brought complaints against Wisconsin, Illinois, Arizona, Connecticut, New York, New Mexico, Minnesota and Rhode Island.