38 Attorneys General Just Lined Up Against Prediction Markets While the CFTC Takes the Fight to the Massachusetts Supreme Court

April 24, 2026 produced one of the starkest illustrations yet of just how fractured the fight over prediction markets has become. On the same day, the Commodity Futures Trading Commission filed an amicus brief at the Massachusetts Supreme Judicial Court asserting exclusive federal jurisdiction over Kalshi and all CFTC-regulated prediction markets — and a coalition of 38 state attorneys general filed their own brief in the same court, arguing the exact opposite. The CFTC and 38 state AGs, in the same court, on the same day, staking out opposing positions. That is the state of the prediction markets legal war right now.

What the CFTC Filed and Why

The CFTC’s amicus brief in Commonwealth of Massachusetts v. KalshiEx LLC, No. SJC-13906, argues that the Commodity Exchange Act gives the agency sole authority to regulate commodity derivatives markets, including prediction market event contracts. CFTC Chairman Michael Selig was direct in his statement accompanying the filing: “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.”

Massachusetts sued Kalshi in September 2025 — becoming the first state to sue a prediction market — alleging that the company’s sports event contracts constituted unlicensed sports betting under state law. Kalshi countered that its contracts are financial instruments regulated as swaps under the Commodity Exchange Act, placing them squarely under CFTC oversight. A lower court issued a preliminary injunction barring Kalshi from offering sports contracts to Massachusetts residents while the case proceeds. The case is now at the state’s Supreme Judicial Court, and the CFTC’s brief is an effort to get the court to strike down that injunction on federal preemption grounds.

The Coalition on the Other Side

The 38-AG brief — penned by Nevada Attorney General Aaron Ford and Ohio Attorney General Dave Yost — is a direct rebuttal. The coalition spans Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Wisconsin, and the District of Columbia.

Their central argument is that Kalshi’s theory of CFTC preemption “threatens the states’ longstanding ability to protect their citizens” in the area of gambling regulation. The brief argues that the Dodd-Frank Act, which Kalshi cites as establishing CFTC jurisdiction over swaps, was designed to regulate financial products tied to the 2008 financial crisis — not to create a nationwide pathway for unregulated sports gambling. New York Attorney General Letitia James said on April 24 that “prediction markets cannot ignore states’ gambling laws that are designed to protect consumers.”

The coalition also cited platform activity in the Massachusetts lawsuit, noting that from January to June 2025, bettors wagered more than $1 billion on 3.4 million sports wagers on Kalshi alone, with roughly 90 percent tied to sports betting. The attorneys general argued that figure underscores the consumer protection stakes of the case.

The Broader Legal War

The Massachusetts SJC filing is not an isolated front. The CFTC has also filed lawsuits against Arizona, Connecticut, Illinois, and New York in federal court, seeking to block those states from enforcing their gambling laws against CFTC-registered exchanges. The agency secured a temporary restraining order against state regulation in Arizona. The question of whether federal law preempts state sports betting regulation as applied to prediction markets is now being litigated simultaneously in multiple courts across the country.

What makes the 38-AG coalition notable is its breadth. It includes states with legal sports betting and states without it, red states and blue states. The political coalition arrayed against the CFTC’s position is not a narrow ideological bloc — it reflects a near-universal consensus among state law enforcement officials that gambling regulation is a state function. For anyone tracking the prediction markets legal landscape, the alignment is hard to overstate.

Whether the Massachusetts SJC agrees will be one of the most consequential decisions in the industry’s short history.