CFTC sues Utah to stop it shutting down prediction markets

The US derivatives regulator has sued Utah to stop the state from using its own laws to shut down prediction markets registered with the regulator. The Commodity Futures Trading Commission (CFTC) announced the lawsuit on 27 October 2026. Prediction markets trade event contracts, which pay out depending on whether a stated event happens.

The suit follows civil enforcement actions that Utah filed in state court against CFTC-regulated markets and other businesses. The regulator says Utah’s effort to restrict the exchanges obstructs Congress’s decision to federally preempt state law, meaning federal law takes precedence.

The details

• The regulator’s claim: Utah’s actions interfere with the operation of CFTC-registered contract markets.
• Chairman’s statement: Michael S. Selig said Utah “seeks to shut down prediction markets across a wide variety of markets” and that Congress gave the agency sole responsibility for overseeing them.
• His argument on purpose: event contracts serve hedging and investment, and also give the public information about the outcome of future events, he said.
• Not stated: the release does not name the exchanges or businesses Utah has pursued, the state court involved, or the court where the suit was filed.

Why it matters

The dispute now runs on two tracks in Utah: state-court enforcement actions against the markets and businesses, and a federal suit over which level of government may regulate them. The release does not say whether the state cases are paused.

Utah is the tenth state the regulator has taken legal action against: it has begun proceedings against nine others and filed briefs in four federal courts of appeal and one state supreme court.

The big picture

On 9 October 2026 the agency proposed to define sports, politics, culture and weather event contracts as swaps, with Selig describing them as within its exclusive jurisdiction.

What’s next

The release gives no hearing dates or deadlines for the Utah case.