The Commodity Futures Trading Commission (CFTC) has asked a federal court in Arizona to block the state from using its gambling and criminal laws against federally regulated prediction markets.
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The regulator filed a request Wednesday for a preliminary injunction and a temporary restraining order to prevent enforcement actions in Arizona.
The federal regulator opposes state enforcement
The filing comes after a lawsuit filed last week That’s enough for you
and the Department of Justice, challenging Arizona’s efforts to prosecute companies operating under federal supervision. The regulator argues that Arizona’s actions conflict with federal law and could undermine the CFTC’s authority over event-based contracts.
“Arizona’s decision to weaponize the state’s preemptive criminal law against companies that comply with a sweeping federal regulation sets a dangerous precedent,” CFTC Chairman Michael Selig said. He added that the agency “will vigorously defend its exclusive authority” in prediction markets.
Latest developments follow Recent lawsuits filed by the CFTC against Arizona, Connecticut, and IllinoisHe accused states of overstepping their authority by interfering in federally regulated prediction markets.
The agency argues that these states illegally sought to impose restrictions on designated contract markets (DCMs) approved by the Commodity Futures Trading Commission (CFTC), in violation of the Commodity Exchange Act (CEA). Selig said the commission would continue to defend its exclusive jurisdiction over event contracts, financial instruments that allow trading on outcomes such as elections or corporate performance, to prevent fragmented oversight and protect market participants from inconsistent state rules.
Wider dispute over jurisdiction
The lawsuits expand Selig’s campaign to reassert federal control over prediction markets, following previous filings and regulatory clarifications issued by the Commission.
Continue reading: The Commodity Futures Trading Commission (CFTC) is suing Arizona, Connecticut and Illinois for overreaching in prediction markets
The CFTC maintains that event-based contracts are derivatives subject to its jurisdiction, not gambling products, and that insider trading laws apply to all such trading activities. The state of Arizona went further by pursuing criminal charges, prompting the federal regulator to seek judicial intervention.
Under the Commodity Exchange Act, the Commodity Futures Trading Commission (CFTC) has exclusive authority to regulate event contracts, which includes prediction markets. The agency says this federal law preempts state-level efforts to enforce interference
Systems. The outcome of the Arizona case could shape how prediction markets operate across the United States.
Earlier, Selig The legal battle between federal and state regulators has escalated on prediction markets, declaring that the US Financial Derivatives Regulatory Authority, not state authorities, has sole oversight of event contracts. He said the agency filed an amicus brief to strengthen its “exclusive jurisdiction” over prediction markets, describing such contracts as federally regulated derivatives.
This article was written by Jared Kirroy at www.financemagnates.com.
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