The Commodity Futures Trading Commission (CFTC) has filed a federal lawsuit alongside the United States against Utah and Attorney General Derek Brown, seeking to block state gambling enforcement against prediction markets registered with the agency. The plaintiffs seek a declaration that federal law preempts Utah’s restrictions, plus preliminary and permanent injunctions barring enforcement and investigations involving transactions on CFTC regulated exchanges, including those involving their affiliates and partners. The filing follows Utah’s Oct. 20, 2026, lawsuit against Kalshi companies and Susquehanna entities in state court. Utah alleges that event contracts offered through Kalshi constitute illegal gambling and seeks to prohibit contracts covered by its gambling laws, including sports and election contracts, and obtain monetary relief. The federal complaint argues that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over event contracts as swaps traded on designated contract markets, preempting Utah’s restrictions. It also contends that denying Utah residents access would conflict with federal requirements for impartial market access and undermine the federal process for listing contracts. The CFTC had already initiated legal proceedings against nine other states.
US Commodity Futures Trading Commission sues Utah to block gambling enforcement against registered prediction markets
The Commodity Futures Trading Commission (CFTC) has sued Utah and its attorney general to prevent state gambling enforcement from restricting event contracts traded on federally regulated exchanges. Following Utah’s action against Kalshi companies and Susquehanna entities, the federal complaint seeks a declaration of federal preemption and preliminary and permanent injunctions. It argues that the Commodity Exchange Act places these contracts under the CFTC’s exclusive jurisdiction.