The CFTC sued Arkansas on Nov. 13 to stop the state from halting event-contract trading and hitting CFTC-registered exchanges with civil penalties of up to hundreds of millions of dollars.

Key Takeaways

  • The CFTC filed a lawsuit against Arkansas on Nov. 13
  • Arkansas is bringing a civil enforcement case against Kalshi in state court
  • The state's actions could bring up to hundreds of millions of dollars in civil penalties
  • Arkansas is the 11th state the CFTC has sued

The agency announced that it filed the suit to block the state's attempts to halt event-contract trading. The CFTC said Arkansas's efforts to obstruct CFTC-registered exchanges operating lawfully under the Commodity Exchange Act are preempted by federal law.

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What Arkansas Is Doing

The CFTC said Arkansas is bringing a civil enforcement action against Kalshi in state court. The agency described Kalshi as a CFTC-designated contract market.

The CFTC said the state also seeks to impose up to hundreds of millions of dollars in civil penalties on CFTC-registered exchanges.

What The CFTC Says

Chairman Michael S. Selig said prediction markets continue to prove their value in being "useful for risk management" and in "providing the public with valuable information about the future." He said Arkansas "seeks to shut down event contracts ranging from sports and politics to other important world events."

Selig said the CFTC "will continue to defend its sole jurisdiction over these federally regulated markets as granted by Congress under the Commodity Exchange Act." He added that the Commission "will not let state interference thwart its regulatory efforts and destroy federally regulated markets."

A Growing Legal Campaign

The CFTC said Arkansas is the 11th state it has sued to vindicate federal sovereign interests. It has also submitted amicus briefs in appeals courts and a state high court.

CFTC Action Count
States sued, with Arkansas as the latest 11th state
Federal Courts of Appeal with amicus briefs 4
State Supreme Courts with amicus briefs 1

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Originally published on Fathom News.