CFTC backs Kalshi as appeals court weighs prediction markets jurisdiction
The US Commodity Futures Trading Commission (CFTC) urged the Sixth Circuit to affirm CFTC jurisdiction over prediction markets. In a new amicus brief, the CFTC said Ohio officials effectively tried to regulate Kalshi’s sports event contracts by ordering the platform to stop, calling them unlicensed sports gambling.
Kalshi sued Ohio in October to block actions by the Ohio Casino Control Commission and the state attorney general. After a federal court denied Kalshi’s request in March, Kalshi appealed.
CFTC Chairman Mike Selig argued the district court took an “improperly narrow” view of CFTC authority and warned against “overzealous state governments” undermining CFTC prediction markets oversight. The CFTC also cautioned that allowing state regulation of sports event contracts could spill into other event contracts traded on designated contract markets (DCMs), where the agency oversees similar products as swaps or binary options.
This is the CFTC’s second amicus filing supporting a prediction market case. It previously backed Crypto.com in the Ninth Circuit and has taken enforcement steps against multiple states after cease-and-desist actions involving Kalshi and Polymarket.
For crypto traders, clearer CFTC prediction markets jurisdiction could reduce US regulatory uncertainty around derivatives-like event contracts, but the near-term outcome still hinges on the Sixth Circuit’s ruling and could keep traders cautious around US prediction-market products.
Neutral
CFTC’s push to confirm its jurisdiction over prediction markets directly targets US regulatory uncertainty. A ruling that strengthens CFTC prediction markets authority could be mildly positive longer term because it may reduce the risk of fragmented state enforcement and support compliance clarity for derivatives-like event contracts.
However, the impact is neutral for traders right now because (1) the Sixth Circuit outcome is not yet known, and (2) enforcement and litigation risk can still affect platform access, liquidity, and event-contract availability in the near term. In short, the direction is clarity-seeking, but timing and court risk keep the market reaction balanced rather than clearly bullish or bearish.