Launchy Regulatory Roundup #99 - 44 States Challenge CFTC Authority
New York Sues Kalshi for $36B
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In Today’s Edition:
Headline: 44 States Challenge CFTC Authority
Global Legal Roundup
Case Study: New York Sues Kalshi for $36B
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HEADLINE
44 States Challenge CFTC Authority
State of play: A coalition of 44 state attorneys general told the CFTC it lacks authority to regulate sports related prediction markets, deepening the jurisdictional fight playing out across state courts.
The letter, led by Ohio AG Andy Wilson, argues the CFTC’s proposed rule exceeds its statutory authority under the Commodity Exchange Act.
The AGs said states have long regulated gambling including sports bets, while the federal government has not.
The NFL separately urged CFTC Chair Michael Selig to strengthen rules protecting game integrity and consumers.
Courts remain split, a judge blocked Minnesota’s prediction market ban while a New York judge again declined to block the state’s gambling law enforcement against Kalshi.
Michigan and Washington courts have already issued orders temporarily halting Kalshi’s sports related event contracts.
What’s Next: The CFTC must weigh the AGs’ comments as it finalizes its prediction markets rule, while litigation continues in Minnesota, New York, Michigan, and Washington with no unified court stance yet.
Why it Matters: This is a direct challenge to the CFTC’s claim of exclusive federal jurisdiction over sports event contracts, and the outcome will determine whether states can keep enforcing their own gambling laws against platforms like Kalshi and Polymarket.
Our Take: The state court split, Minnesota blocked, New York and Michigan enforced, shows this isn’t heading toward a clean resolution anytime soon
GLOBAL LEGAL ROUNDUP
America:
🇺🇸 Circle secures NYDFS trust charter.
🇺🇸 Senate Democrats propose anti-corruption bureau.
🇺🇸 JPMorgan says crypto bill’s fading odds hurt outlook.
🇺🇸 Judge blocks Minnesota from enforcing prediction market ban.
🇺🇸 NY sues Kalshi over illegal gambling claims, seeks $36B in damages.
🇺🇸 44 state AGs says CFTC lacks authority over sports prediction markets.
🇺🇸 George Santos agrees to pay $35K in CFTC settlement over Kalshi SOTU bet.
Europe:
ðŸ‡ðŸ‡º Hungary repeals crypto checks as first MiCA license is granted.
🇷🇺 Russia detains crypto mining firm BitRiver founder on fraud charges.
🇷🇺 Russia’s central bank drafts first rules for ‘organized’ crypto trading.
🇷🇺 Russian decree bans crypto mining across Moscow region through 2032.
APAC:
🇰🇷 South Korea report proposes stablecoin rules before crypto law.
🇦🇺 Australia sues Telegram over alleged failures to remove terror content.
🇲🇲 Myanmar Parliament passes crypto scam bill with penalties up to life.
CASE STUDY
New York Sues Kalshi for $36B
State of play: New York filed suit against Kalshi alleging illegal gambling operations in the state, seeking at least $36B in damages and escalating the nationwide legal fight over prediction markets.
Attorney General Letitia James alleges Kalshi let users wager on sports, culture, and elections without a state gaming license, including underage users.
New York is seeking a restraining order, restitution, disgorgement of proceeds, and treble penalties on top of the $36B compensatory claim.
The CFTC filed its own restraining order motion to block New York from pursuing enforcement against CFTC registered platforms like Kalshi.
Kalshi already faces restrictions in Michigan and Washington, though Minnesota blocked its own ban and allowed Kalshi to keep operating.
Kalshi remains the largest prediction market platform globally, with $33B in June volume versus Polymarket’s combined $13.95B.
Our Take: New York’s suit is the most aggressive move yet in this fight, and the $36B figure plus nationwide disgorgement threat signals states are done waiting for the CFTC to settle jurisdiction.
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