US CFTC sues Illinois over prediction markets

The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against the state of Illinois over prediction markets. According to BeInCrypto, 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 core of the lawsuit is federal preemption, with the CFTC arguing that it holds 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 federal authority. Meanwhile, Illinois has sent cease-and-desist orders to Kalshi, Polymarket, Crypto.com, and Robinhood.