The Commodity Futures Trading Commission (CFTC) filed a lawsuit to halt the State of New York’s efforts to apply state gambling laws against CFTC-registered contract markets.
In its complaint against New York, filed in the U.S. District Court for the Southern District of New York, the CFTC seeks a declaratory judgment that federal law grants it exclusive authority to regulate event contracts. The CFTC requests a permanent injunction preventing the state from enforcing preempted state laws against its registrants.
“CFTC-registered exchanges have faced an onslaught of state lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets. New York is the latest state to ignore federal law and decades of precedent by seeking to enforce state gambling laws against CFTC-registered exchanges,” Chairman Michael Selig said. “As I’ve said before, the CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets.”
New York State has sought to enforce state laws against CFTC-registered entities through cease-and-desist letters and civil enforcement suits.
The CFTC’s action builds upon ongoing efforts to affirm its exclusive jurisdiction over CFTC-registered designated contract markets that offer trading in event contracts. This action follows similar CFTC lawsuits in Arizona, Connecticut, and Illinois.