The Commodity Futures Trading Commission filed an amicus brief on April 24 in the Massachusetts Supreme Judicial Court, confirming its exclusive jurisdiction over U.S. commodity derivatives markets, including event contract or prediction markets. The filing was made in the case Commonwealth of Massachusetts v. KalshiEx LLC, No. SJC-13906.
This move is part of the CFTC’s broader effort to protect its regulatory authority over prediction markets from what it describes as ongoing state-level encroachment.
“Some states continue to pursue ever-escalating, illegal enforcement actions against CFTC-regulated exchanges, despite rulings from multiple courts halting those efforts,” said Chairman Michael S. Selig. “Congress has entrusted the CFTC with the sole authority to regulate commodity derivatives markets, including prediction markets. To any state that seeks to nullify federal law and seize authority over these markets, I say again: we will see you in court.”
The amicus brief details the history and structure of the Commodity Exchange Act and argues that Congress’s comprehensive regulatory scheme preempts state laws when applied to CFTC-regulated markets.
Previously, the CFTC has filed lawsuits against Arizona, Connecticut, Illinois, and New York regarding similar issues and secured a temporary restraining order against state regulation of CFTC-regulated prediction markets in Arizona. The agency has also submitted an amicus brief before the U.S. Court of Appeals for the Ninth Circuit on this matter.
The outcome of this case may further clarify federal versus state oversight concerning prediction market regulation.