CFTC sues Kentucky over prediction market regulatory authority, making it the ninth state sued

CoinFeed June 24 news, according to The Block, the U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Kentucky to establish its federal regulatory primacy over prediction markets. This follows Kentucky's lawsuit last week against platforms like Kalshi and Polymarket, accusing them of illegally operating sports betting and gambling services without state licenses. In its complaint filed in the U.S. District Court for the Eastern District of Kentucky, the CFTC argues that the state's attempt to shut down federally regulated designated contract markets violates the exclusive federal framework designed by Congress to regulate the national swap market. The CFTC also criticized Kentucky's legislation imposing a 14.25% tax on prediction market transaction fees, stating that the rule "effectively makes it impossible for prediction markets to operate in the state."