Spain’s Dirección General de Ordenación del Juego (DGOJ) has announced that it has blocked prediction market operators Polymarket and Kalshi, arguing that both offered their...
US government sues 3 states over prediction market regulations
On April 2, 2026, the federal government of the U.S. under President Donald Trump’s administration filed a lawsuit against Arizona, Connecticut, and Illinois to stop the states from trying to regulate prediction markets under state law, stressing that event contracts fall under federal supervision.
The lawsuits came after all three states sent cease and desist orders to prediction market operators like Kalshi, Crypto.com, and Polymarket, accusing them of offering illegal online gambling services. In the filings, the CFTC has stated it is the body responsible for regulating prediction markets, not the states.
CFTC Chairman Michael Selig wrote in a statement:
“The CFTC will continue to safeguard its exclusive regulatory authority over these markets and defend market participants against overzealous state regulators. Congress specifically rejected such a fragmented patchwork of state regulations because it resulted in poorer consumer protection and increased risk of fraud and manipulation.”
The U.S. government added to the complaints:
“This court should put an end to the ongoing efforts by defendants to undermine the uniform application of federal law.”
The federal government said that Connecticut and Illinois “misapprehend” prediction market contracts and that allowing states to regulate them will violate the U.S. Constitution.
Arizona’s, Connecticut’s, and Illinois’ governors and attorneys, Katie Hobbs and Kris Mayes; Ned Lamont and William Tong; and JB Pritzker and Kwame Raoul, respectively, have been named as defendants in the lawsuit. As a response, state officials have criticized the actions of the federal government.
The authorities in South Korea have launched an investigation into Polymarket to decide whether the platform’s product is classified as illegal gambling under the country’s...
