The U.S. Commodity Futures Trading Commission intervened between Michigan courts and prediction market firm Kalshi on Tuesday, issuing an order refusing the company to comply with a local court’s demand to void past customer transactions.
The CFTC move is intensifying its legal battle with state governments and courts over what its chairman claims is its unbreakable and exclusive regulatory authority over trading on Kalshi, which it regulates as a designated contract market (DCM).
“The Commission will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC rules,” CFTC Chairman Mike Selig said in a statement accompanying his agency’s order. Selig has embraced prediction markets and promised to introduce friendly rules, and he has also vigorously defended his agency’s authority to regulate them in a way that overrides state powers.
The CFTC has sued a number of states that have tried to stop or punish event contracting companies as illegal gambling. The agency noted Tuesday that Michigan is the first state to try to directly interfere in transactional activity.
