TechFlow News, June 24: According to The Block, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Kentucky on Tuesday, alleging that the state attempted to shut down designated contract markets regulated at the federal level—thereby interfering with Congress’s grant of exclusive federal regulatory authority over the national swaps market. Previously, Kentucky had sued prediction market platforms such as Kalshi and Polymarket, accusing them of operating unlicensed illegal sports betting and gambling businesses within the state.
The CFTC stated that Kentucky’s recently enacted legislation requires prediction markets to pay a 14.25% tax on transaction fees—a measure that effectively renders prediction market operations infeasible within the state. Kentucky has become the ninth state sued by the CFTC over such disputes, reflecting an ongoing and widening conflict between federal regulators and individual states regarding jurisdiction over prediction market regulation.
