Screens with logo and homepage of the prediction market platform Polymarket in Saint-Mande, east of Paris, April 29, 2026.
Martin Lelievre | Afp | Getty Images
The Commodity Futures Trading Commission announced Thursday that it is suing Rhode Island, a week after the state took action against two prediction market platforms.
It is the seventh state the CFTC has sued in a dispute over who has the authority to regulate prediction markets.
Rhode Island Attorney General Peter Neronha sued Kalshi and Polymarket last week, arguing that the companies violated the state’s sports betting laws with their sports event contracts, an argument other states have also made. However, the CFTC maintains that the right to regulate these markets falls under the federal agency’s jurisdiction over swaps and derivatives, which it says includes event contracts.
“CFTC-registered exchanges have faced a flood of lawsuits aimed at restricting Americans’ access to event contracts and undermining the CFTC’s sole regulatory authority over prediction markets,” CFTC Chairman Michael Selig said in a press release announcing the lawsuit. “This power grab ignores the law and decades of precedent.”
The CFTC is seeking to intervene in the state’s existing lawsuit against the platforms and has also filed its own complaint against Rhode Island.
A total of 18 countries are currently involved in legal disputes over prediction markets. One of those states, Minnesota, has decided to ban them completely.
In a social media post on Tuesday, President Donald Trump said it was critical that the commission’s exclusive jurisdiction to regulate the prediction market be maintained.
While authorities in states involved in litigation over prediction markets are on both sides of the aisle, the CFTC has only prosecuted those with Democratic attorneys general. Neronha, Rhode Island’s attorney general, is also a Democrat.
“We allege that Kalshi and Polymarket are operating outside of our sports betting laws, and ultimately Rhode Islanders will have to foot the bill for their actions. Federal intervention in this lawsuit does not change that,” Neronha said in a statement. “We believe in our cause and are ready to step up on behalf of Rhode Islanders.”
Disclosure: CNBC and Kalshi have a business relationship that includes customer acquisition and minority ownership.
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