The U.S. Commodity Futures Trading Commission has sued Louisiana.
The complaint challenges an injunction issued by a state court this month, which ordered more than 30 companies to stop offering event contracts to users in the state, cutting off brokerage, clearing, and settlement services as well. The commission argues that these contracts are governed by federal derivatives law and that state courts have no authority to shut them down across the board.
This is the 12th state the agency has sued over the same dispute. The previous day, Chairman Michael Selig called enforcement actions by some states extremely aggressive at an industry conference. He also noted that one state was pursuing criminal proceedings, turning a debate over the legality of the products into a personal risk for company executives. He wants the jurisdictional dispute sent to the Supreme Court once and for all.
Trading volume in prediction markets has surged this year. The debate over whether they are derivatives or gambling has moved from regulatory filings to state courts, and now to federal court.
The complaint challenges an injunction issued by a state court this month, which ordered more than 30 companies to stop offering event contracts to users in the state, cutting off brokerage, clearing, and settlement services as well. The commission argues that these contracts are governed by federal derivatives law and that state courts have no authority to shut them down across the board.
This is the 12th state the agency has sued over the same dispute. The previous day, Chairman Michael Selig called enforcement actions by some states extremely aggressive at an industry conference. He also noted that one state was pursuing criminal proceedings, turning a debate over the legality of the products into a personal risk for company executives. He wants the jurisdictional dispute sent to the Supreme Court once and for all.
Trading volume in prediction markets has surged this year. The debate over whether they are derivatives or gambling has moved from regulatory filings to state courts, and now to federal court.
