The Commodity Futures Trading Commission has intensified its dispute with Michigan by directing Kalshi to continue honoring trades involving state residents. The federal regulator argued that market participants deserve certainty and consistent treatment regardless of where they live.
Consequently, the decision deepens an ongoing conflict over whether federally regulated prediction markets fall under state gambling laws or exclusive federal oversight. The latest action also signals that the jurisdictional battle could reshape how prediction market platforms operate across the United States.
Federal Regulator Defends Market Authority
CFTC Chairman Michael Selig said federal law requires designated contract markets to treat customers equally across all states. Therefore, he maintained that Michigan cannot compel Kalshi to unwind completed trades.
Additionally, Selig warned that reversing executed contracts could damage confidence in financial markets and create broader instability. The CFTC believes Congress granted the agency sole authority to supervise these federally registered exchanges.
State Dispute Expands Nationwide
Michigan previously ordered Kalshi to stop offering sports-related event contracts and unwind selected transactions. However, the CFTC rejected that approach and defended its regulatory jurisdiction.
Moreover, the agency has launched legal challenges involving Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin. Hence, the growing legal confrontation highlights increasing tensions between state officials and federal regulators over prediction markets and their legal status.
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