The federal government on Thursday sued Connecticut, Arizona and Illinois, challenging their efforts to regulate such as Kalshi and Polymarket.
All three states have sent cease and desist orders to such companies accusing them of engaging in illegal online gambling under state law. against Kalshi for allegedly violating state gambling laws and a law that makes betting on elections illegal.
The Commodity Futures Trading Commission contends in court filings that it, not the states, regulates these companies.
鈥淭he CFTC will continue to safeguard its exclusive regulatory authority over these markets and defend market participants against overzealous state regulators,鈥� CFTC Chairman Michael S. Selig said in a written statement. He said Congress 鈥渞ejected such a fragmented patchwork of state regulations鈥� because it led to increased risk of fraud and poor consumer protection.
Last month, the Trump administration behind the operators Kalshi and Polymarket in a critical legal battle that could have implications for how sports betting is regulated.
Connecticut Attorney General William Tong on Thursday accused the Trump administration of 鈥渞ecycling industry arguments鈥� that have been rejected in district courts across the country.
鈥淭hese contracts are plainly unlicensed illegal gambling under time-worn state law, and we will aggressively defend Connecticut鈥檚 commonsense consumer protection laws,鈥� he said.
Copyright © 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.
