CFTC sues Utah to stop it from shutting down federally registered prediction markets

The Commodity Futures Trading Commission (CFTC), the federal agency that oversees futures and other financial contracts, said Tuesday it has sued the state of Utah. The agency wants to stop Utah from trying to shut down prediction markets that are registered with the CFTC ¹.

Prediction markets are websites where people buy and sell contracts that pay off depending on whether a future event happens. Utah says one of them, Kalshi, lets residents bet on sports, elections and politics, and that this breaks state gambling law ¹.

What each side says

CFTC Chairman Michael S. Selig said Utah wants to close prediction markets across many kinds of events ¹. He argued that Congress made the CFTC the federal regulator with sole responsibility for these markets ¹.

Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets.

In its announcement, the CFTC said it would "protect federal sovereign interests" if a state challenges a registered exchange ¹. It also said it is committed to keeping "exclusive jurisdiction" over registered prediction markets ¹.

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Utah's attorney general, Derek Brown, sees it the opposite way. His office sued Kalshi this month, and he said the company is running a casino under another name ¹. Utah is one of the few states that bans all forms of gambling ¹.

Kalshi runs an online casino in Utah and calls it a prediction market. That violates Utah law.

How the fight got here

In February, Kalshi sued Utah Gov. Spencer Cox, a Republican, and other state officials to block a possible enforcement action ¹. In August, a federal judge in Utah ruled that the Commodities Exchange Act does not stop Utah from enforcing its gambling limits against prediction markets ¹.

Cointelegraph, a crypto news site, reported that an appeals court denied Kalshi's request for an injunction in September. It also reported that Utah's new suit seeks the return of roughly $30 million to $60 million in profits from contracts the state calls illegal ². Cointelegraph said Utah counts more than 32,000 Kalshi users in the state ².

Earlier this year, Selig said the CFTC would challenge any state's attempt to regulate prediction markets ¹. Cox answered that he would use every resource available to the state to beat the agency in court ¹.

What happens next

The wire reports do not say which court will hear the CFTC's case or when a ruling might come. A federal judge in Utah has already ruled that the Commodities Exchange Act does not stop Utah from enforcing its gambling limits against prediction markets ¹.

That matters because this is a Republican-run federal agency suing a Republican-led state over who has the power to regulate betting. The outcome could decide whether states can police these sites at all, including contracts on elections, a week before the Nov. 3 midterms ¹.

The case turns on whether a single federal agency or the states will set the rules for these markets ¹. The courts, and eventually Congress, will have to answer how far that oversight reaches.

The Record

1. Feb 24, 2026Kalshi sued Utah Gov. Spencer Cox and other state officials to block a possible enforcement action ¹.
2. Aug 1, 2026A federal judge in Utah ruled that the Commodities Exchange Act does not stop Utah from enforcing its gambling limits against prediction markets (approximate month; the ruling was in August) ¹.
3. Oct 20, 2026Utah sued Kalshi, alleging it lets Utahns bet on sports, elections and politics in violation of state gambling law ¹².
4. Oct 27, 2026The CFTC sued Utah to stop it from shutting down CFTC-registered prediction markets ¹.

Sources

1. The Hill, “CFTC sues to block Utah from enforcing gambling laws against prediction markets” (2026-10-27). thehill.com/policy/technology/6175898-cftc-sues-utah-predict
2. Cointelegraph, “Utah lawsuit against Kalshi and Susquehanna over prediction markets” (2026-10-20). cointelegraph.com/news/utah-lawsuit-kalshi-susquehanna-predi

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