The Commodity Futures Trading Commission (CFTC) has asked a federal court in Arizona to stop the state from using its gambling and criminal laws against federally regulated prediction markets.

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The regulator filed a motion on Wednesday seeking a preliminary injunction and temporary restraining order to block Arizona’s enforcement actions.

Federal Regulator Opposes State Enforcement

The filing follows a lawsuit lodged last week by the CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term and the Department of Justice, challenging Arizona’s efforts to prosecute companies operating under federal oversight. The regulator argues that Arizona’s actions conflict with federal law and could undermine the CFTC’s authority over event-based contracts.

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“Arizona’s decision to weaponize preempted state criminal law against companies that comply with a comprehensive federal regime sets a dangerous precedent,” said CFTC Chairman Michael Selig. He added that the agency will “vigorously defend its exclusive authority” over prediction markets.

The latest development follows the CFTC’s recent filings of lawsuits against Arizona, Connecticut, and Illinois, accusing the states of overstepping their authority by interfering with federally regulated prediction markets.

The agency argues that these states unlawfully sought to impose restrictions on designated contract markets (DCMs) approved by the CFTC, in violation of the Commodity Exchange Act (CEA). Selig said the commission will continue to defend its exclusive jurisdiction over event contracts, financial instruments that allow trading on outcomes such as elections or corporate performance, to prevent fragmented oversight and protect market participants from inconsistent state rules.

Broader Dispute Over Jurisdiction

The lawsuits extend Selig’s campaign to reaffirm federal control over prediction markets, following earlier filings and regulatory clarifications issued by the commission.

Continue reading: CFTC Sues Arizona, Connecticut, and Illinois for Overreach on Prediction Markets

The CFTC maintains that event-based contracts are derivatives under its jurisdiction, not gambling products, and that insider trading laws apply to all such trading activities. Arizona has gone further by pursuing criminal charges, prompting the federal regulator to seek judicial intervention.

Under the Commodity Exchange Act, the CFTC holds exclusive authority to regulate event contracts, which include prediction markets. The agency says this federal law preempts state-level efforts to impose overlapping regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term. The outcome of the Arizona case could shape how prediction markets operate across the United States.

Earlier, Selig escalated a jurisdictional clash between federal and state regulators over prediction markets, declaring that the U.S. derivatives watchdog, not state authorities, has sole oversight of event contracts. He said the agency has filed an amicus brief to reinforce its “exclusive jurisdiction” over prediction markets, describing these contracts as derivatives subject to federal regulation.