The Commodity Futures Trading Commission headquarters in Washington, Dec. 23, 2022.Ting Shen | Bloomberg | Getty ImagesAs prediction markets’ volumes grow at a ruthless pace, their businesses are being challenged by states across the country. The federal government is fighting a multifront battle to stop the state actions and assert its regulatory authority. Sixteen states are involved in legal proceedings against prediction market platform companies, while one state has moved to ban them entirely.The Commodity Futures Trading Commission argues it’s the only entity that can regulate these platforms, and the agency has sued six states to defend what it describes as its “exclusive jurisdiction” over prediction markets. Minnesota became the latest in the government’s crosshairs Tuesday, when the commission sued the state after Gov. Tim Walz signed a law as part of a broader online safety package that would ban prediction markets from operating in the state — a first in the country.Jeff Le Riche, a former chief trial attorney at the CFTC and now a partner at Husch Blackwell, said the aggressive strategy isn’t typical of the federal agency. “The suing of states is unusual,” he said. “That’s definitely a different tactic.”CFTC Chair Michael Selig has been clear since his confirmation by the U.S. Senate in December about his views on the agency’s oversight of prediction markets. He also is, for now, the only member on the commission, which typically is a body of five. “States cannot circumvent the clear directive of Congress,” Selig said in an April press release announcing a lawsuit against Wisconsin. “Our message to Wisconsin is the same as to New York, Arizona, and others: if you interfere with the operation of federal law in regulating financial markets, we will sue you.”Scrambling partisan dividesMichael Selig, President Donald Trump’s nominee to lead the Commodity Futures Trading Commission, is sworn in during a Senate Agriculture, Nutrition, and Forestry Committee hearing on Capitol Hill, in Washington, Nov. 19, 2025.Andrew Harnik | Getty ImagesThe battle between states and the federal government for oversight of prediction markets has scrambled typical partisan divides. Eleven states that have ong …
