CFTC Moves to Block Arizona Enforcement Against Regulated Prediction Markets

The Commodity Futures Trading Commission (CFTC) has filed a motion in the U.S. District Court for the District of Arizona seeking a temporary restraining order and preliminary injunction to halt state efforts to apply criminal and gambling laws against CFTC-regulated prediction markets. The court filing follows a lawsuit submitted in coordination with the U.S. Department of Justice to challenge Arizona's enforcement actions. The CFTC argues that state-level enforcement undermines federal authority and disrupts markets operating under federal oversight. CFTC Chairman Michael S. Selig noted that state attempts to enforce preempted criminal statutes against federally compliant firms establish a concerning precedent. Selig stated that the commission remains committed to defending its exclusive jurisdiction over prediction markets and preventing state measures from circumventing federal law. The regulatory dispute extends beyond Arizona. The CFTC has also filed complaints against Connecticut and Illinois, seeking declaratory judgments confirming the agency's exclusive authority to oversee event contracts under the Commodity Exchange Act (CEA) and permanent injunctions barring state-level enforcement. All three states had previously issued cease-and-desist notices to CFTC-registered entities, with Arizona additionally pursuing criminal charges. The CFTC reiterated that the CEA provides the commission with clear and exclusive jurisdiction over event contracts, preempting state statutes that seek to regulate prediction market platforms.