CFTC sues Utah to stop state action against registered prediction markets

The US Commodity Futures Trading Commission (CFTC) has sued the state of Utah to stop it from using state law to shut down CFTC-registered contract markets, the agency announced on 27 October 2026. The CFTC is asking the court for declaratory and injunctive relief.

The dispute

According to the CFTC, the lawsuit follows Utah’s decision to bring civil enforcement actions in state court against CFTC-regulated markets and other businesses. The CFTC argues that Utah’s efforts to restrict CFTC-registered exchanges obstruct Congress’s decision to give federal law priority over state law in this area.

“Utah seeks to shut down prediction markets across a wide variety of markets,” said CFTC Chairman Michael S. Selig. He said Congress made the CFTC the sole federal regulator of these markets, and that the agency will defend its exclusive jurisdiction over commodity derivatives.

The agency says event contracts serve hedging and investment purposes and also give the public information about the likely outcome of future events.

A wider campaign

Utah is not the first state the CFTC has gone after. The release says the Commission has also started legal proceedings against nine other states, and has filed briefs in four federal courts of appeal and one state supreme court. The CFTC says that whenever a state challenges the lawful operation of a derivatives exchange, it will act to protect federal interests.

What it means for traders

For traders who use prediction markets, the case is part of a wider fight over whether states can stop residents trading event contracts on exchanges registered with the CFTC. Until the courts settle that question, access to these markets can depend on which state a trader lives in. The CFTC’s recent agreement with the National Basketball Association on sports prediction markets is covered in our earlier brief.

What happens next

The case now goes before the court. The CFTC’s release does not give a hearing date.