Feds push back against states on prediction markets

Driving the news: CFTC chair Mike Selig said last week that the commission is filing friend-of-the-court briefs in cases where "American prediction markets have been hit with an onslaught of state-led litigation."

• The CFTC will "defend its exclusive jurisdiction over these derivative markets," Selig said in a video post. "To those who seek to challenge our authority in this space, let me be clear — we will see you in court."

The other side: The American Gaming Association, which represents casinos and has opposed prediction markets, did not immediately respond to a request for comment.

• The group argued in January that sports event contracts offered by prediction markets "are indistinguishable from legal sports betting" and are illegal.
• A slew of states have taken legal action against prediction markets, including Nevada, Massachusetts, Maryland, Arizona, Michigan, New York and Illinois.

Zoom in: The Arizona Department of Gaming has issued cease-and-desist letters to prediction market platforms Kalshi, Crypto.com, and Robinhood, which it accuses of providing unlicensed event wagering, Arizona's Family reported in December.

• The department disagrees with the commission's comments, saying in a statement to Axios: "Arizona has a clear responsibility to enforce its gaming and wagering laws whenever products operate as gambling within our state."
• The Arizona Attorney General's Office has not taken legal action against prediction markets, unlike its counterparts in some other states.