(AsiaGameHub) –   The Trump administration has filed legal suits against multiple states over their attempts to regulate the prediction markets industry. This move echoes CFTC chair Michael Selig’s prior assertion that state regulators were overstepping their bounds.

The CFTC Claims State Regulators Are Overstepping Their Authority

Prediction markets remain one of the most widely discussed topics among gaming industry stakeholders. This innovative form of trading, which allows participants to buy yes-no shares tied to the outcomes of various events, has long frustrated gambling regulators, traditional gaming operators, and tribal entities alike.

As entities under the oversight of the Commodity Futures Trading Commission, prediction markets are regulated at the federal level — a framework that industry supporters argue takes precedence over state regulations. However, some state regulators firmly believe that prediction markets should follow state rules and have taken steps to rein in the sector.

Per the CFTC’s newly filed lawsuits, these state efforts violate the commission’s exclusive authority to regulate national swaps markets. As a result, the legal actions seek to “put an end to the ongoing efforts by defendants to undermine the uniform application of federal law.”

Michael Selig, chair of the CFTC, pledged to continue protecting market participants against “overzealous state regulators.”

Multiple States Have Taken Steps to Regulate Prediction Markets

The lawsuits come as several states have attempted to either directly regulate prediction markets or force non-compliant entities to cease and desist their operations. Arizona, for example, recently became the first state to file criminal charges against Kalshi. The state has been an outspoken opponent of the prediction markets sector, firmly believing the industry operates in violation of state rules.

Illinois, on the other hand, previously introduced a bill that would grant the Illinois Gaming Board the authority to oversee and license prediction market operators. Iowa just advanced a bill that would regulate prediction markets as a separate vertical, though it has not been named in the current lawsuits.

The lawsuits name Arizona, Illinois, and Connecticut’s Democratic governors and attorneys general as defendants. The three states’ respective gambling regulators have also been listed as defendants.

The office of Illinois’ governor, JB Pritzker, responded to the lawsuits, accusing the Trump administration of trying to downplay Illinois’ own jurisdictional authority and prioritizing profits over the safety of Illinois residents.

Connecticut’s AG, William ​Tong, echoed a similar statement, vowing to “aggressively defend Connecticut’s commonsense consumer protection laws.”