CFTC Directs Prediction Markets to End Geofencing, Setting Up Conflicts with Court Orders and State Laws

The Commodity Futures Trading Commission has ordered designated contract markets, including prediction markets offering sports-event contracts, to end current geofencing restrictions within the U.S. that violate impartial access requirements. Operators must comply within 30 days or explain why compliance is not feasible.

CFTC Chairman Michael S. Selig said in a statement that derivatives markets must operate on a uniform basis at a national scale to achieve the purposes set out in the Commodity Exchange Act. Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements.

Conflicts with Court Rulings and Tribal Lands

Selig’s decision puts prediction market exchanges in direct conflict with court orders requiring geofencing in Nevada, Washington, Michigan, and tribal lands in California. It also places Fanatics, FanDuel, and DraftKings in an awkward position, as they have chosen not to offer sports-event contracts in states where they hold gaming licenses. Some states, such as Ohio and Massachusetts, have threatened license loss for companies offering such contracts.

The CFTC previously ordered Kalshi to ignore court orders in Michigan and New York. This latest guidance follows a preliminary injunction from Judge Jacqueline Scott Corley of the U.S. District Court for the Northern District of California. Corley blocked Kalshi from offering contracts on the lands of the Blue Lake Rancheria and Chicken Ranch Rancheria of We-Wuk Indians after a Ninth Circuit ruling found the sports-event contracts likely constitute Class III gaming under the Indian Gaming Regulatory Act.

The order prohibits contracts on baseball, tennis, pickleball, soccer, basketball, football, golf, chess, esports, hockey, motorsports, boxing, wrestling, and Ultimate Fighting Championship events. The tribes have until Friday to provide Kalshi with maps of their lands. By November 25, Kalshi is required to submit a report to the court detailing the steps the company has taken to comply with the order.

State Lawsuits and Senatorial Scrutiny

Arkansas Attorney General Tim Griffin has sued Kalshi for allegedly operating an illegal gambling business, seeking restitution, civil penalties, unpaid taxes, and an injunction under the Arkansas Deceptive Trade Practices Act. Griffin described Kalshi as a pocket-sized bookie and noted that it allows residents aged 18 to 20 to participate despite the state’s 21-year-old casino minimum.

Four Democratic senators—Catherine Cortez Masto, Jackey Rosen, Adam Schiff, and Richard Blumenthal—are questioning platform X over why users could not report Polymarket ads through its standard interface, while the option existed for Kalshi and others. They raised concerns about preferential treatment and Donald Trump Jr.’s role as advisor and investor. The senators requested a response by November 30.

Senator Adam Schiff criticized the CFTC order on X, writing, “This is the CFTC’s most egregious attempt yet to undermine state law, the tribes and now, the courts. The CFTC chairman has been captured by the industry, and his actions reflect only their interests.”