CFTC sues three states for trying to regulate prediction markets

The CFTC sued Illinois, Arizona and Connecticut for trying to outlaw or regulate prediction markets.

The agency says prediction markets trade futures contracts and fall under its exclusive federal jurisdiction.

Several states, including Nevada, have taken legal action against Kalshi and other platforms for alleged illegal sports or election betting.

Some prediction markets added insider-trading safeguards after high-profile transactions raised concerns about government-linked traders.

CFTC Chairman Michael S. Selig said the agency will defend its regulatory authority against state actions.