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Attorneys general from forty-four states are pushing back against the CFTC’s attempt to oversee sports betting, marking a significant clash over which agency should regulate these types of wagers.
One Message: Sports Bets Belong to the States
A group of officials, led by Ohio Attorney General Andy Wilson, has sent a letter to regulators expressing concerns about a new rule proposed by the Commodity Futures Trading Commission (CFTC). As reported by CNBC, the coalition believes the CFTC is overstepping its authority with this rule, potentially violating the Constitution and acting without clear justification.
They asked the agency to reconsider its position and clarify that sports betting should be regulated by individual state laws, not treated as trading on federal contract markets.
The main point is that there’s virtually no real difference between placing a bet at a sportsbook and entering into a contract on a prediction market. States argue these platforms operate like unlicensed sportsbooks, pointing out they’ve been regulating sports betting for over a hundred years – something the CFTC doesn’t have experience with. They also claim these contracts avoid state licensing requirements, taxes, and rules designed to ensure fair play.
The letter was received just as the deadline for public feedback on the CFTC’s new rules for prediction markets passed Monday night. The group of state attorneys general supporting these concerns has also been expanding, growing from around 40 in the spring to 44 currently.
The Battle Lines Are Now Drawn
As a crypto investor, I’m watching this closely. Basically, the deadline for comments on this new regulation has passed, and things are really split. On one side you have the CFTC pushing forward with their rules, but they’re facing strong opposition from a huge coalition – 44 states, major sports leagues like the NFL and MLB, the gaming industry, and even consumer advocacy groups. They all want the agency to either scale back these regulations or drop them altogether. It’s a pretty significant pushback, and it could impact how crypto is regulated here.
Meanwhile, companies involved in cryptocurrency and prediction markets are also weighing in. Coinbase, Hyperliquid, Multicoin, along with an industry group, have asked the CFTC to create a single, national set of rules for these markets, believing it’s better than dealing with different regulations in each state. The CFTC received over 1,000 public comments on the matter.
Even a Derivatives Exchange Broke Ranks
The division wasn’t clearly defined by industry type. CME Group, a derivatives exchange, cautioned the CFTC that if “gaming” was defined as the game itself, rather than the act of betting on it, the Commodity Exchange Act could override state laws regarding sports betting – a move they considered a significant overstep.
This role is significant because CME Group runs the exchange used for FanDuel’s prediction markets, which are overseen by the CFTC. The fact that a well-known exchange is supporting the states’ position, rather than the agency’s own interpretation of the rules, highlights the ongoing disagreement about what those rules actually mean.
Five States Sat It Out
Despite its wide support, the coalition wasn’t fully unified. Several significant states – Florida, Georgia, New Hampshire, Missouri, and Texas – chose not to sign on, which is notable considering their size and influence regarding gambling laws. Because the effort was presented as a bipartisan one, these absences are especially conspicuous.
A Record Built for the Courtroom
The letter’s main goal is to get ready for legal battles that states have often lost in the past. By focusing on the Administrative Procedure Act and constitutional boundaries, it seems to be building a case for lawsuits once the CFTC finishes its new rule – a rule that experts believe this letter is actually intended to help bring about.
The timing of these events is important because courts have generally sided with the federal government. This spring, a federal appeals court confirmed the CFTC’s sole authority over Kalshi’s contracts, and the agency has since filed lawsuits against nine states to assert its power. After failing to win preemption cases in court, these states are now focusing on influencing the process of creating new rules, hoping to establish a legal foundation that favors their arguments when they inevitably challenge the CFTC’s final decisions.
2026-07-29 09:26