CFTC sues Illinois over prediction market regulation

The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against the state of Illinois over prediction markets, BeInCrypto reported. The regulator has asked a federal court to permanently prohibit Illinois from applying its gambling laws to prediction market operators licensed as Designated Contract Markets (DCMs). The lawsuit's core argument is federal preemption, asserting that the CFTC has exclusive jurisdiction over swaps and futures trading on federally regulated exchanges under the Commodity Exchange Act. The CFTC emphasized that Illinois cannot unilaterally infringe upon or nullify its authority under federal law. Illinois had previously sent cease-and-desist orders to Kalshi, Polymarket, Crypto.com, and Robinhood.