The Commodity Futures Trading Commission (CFTC) has filed a lawsuit in Kentucky, accusing the state of using interest rates and fees to drive down state-regulated markets.
The lawsuit adds Kentucky to a growing list of states that are at loggerheads with the agency over prediction markets and event contracts.
Kentucky Escalates State Pressure on Platforms
The outbreak begins in early June. Kentucky Attorney General Russell Coleman filed lawsuits against Kalshi, Polymarket, and VGW. The action accused the platform of unlicensed racing, illegal betting and gambling across the state.
The CFTC said the action would require larger financial penalties for those involved. In addition, Kentucky also introduced a bill that would do so pay property tax on labor market forecasts.
“On and after January 1, 2027, the value tax is paid to the user of the prediction market at the rate of fourteen and one-third (14.25%) of the fees of the prediction market. The incremental method of accounting will be used to calculate the amount of tax that the borrower must do with the prediction market,” bill they read.
According to the CFTC, the measure is designed to force the platform to leave Kentucky entirely. The administration argues that this prevents “Congress” from deciding federal laws.
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CFTC Chairman Protects Federal Authority
Chairman Michael S. Selig he made the suit as a part adequate protection of the authority of the organization.
“Kentucky is the latest state to try to shut down state-regulated contracts … the CFTC is committed to maintaining its authority over the futures markets, and today’s lawsuit against Kentucky is yet another example of the Commission protecting its interests,” he said. he said.
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Kentucky is not an isolated case. The CFTC has also enacted regulations against Minnesota, Illinois, Rhode Island, etc.
The outcome of these upcoming disputes will determine whether states can block the contracts the CFTC is considering unless they submit.
A note CFTC Sues Kentucky to Stop State Abuse of Prediction Markets appeared for the first time BeInCrypto.
