On April 2, 2026, the Commodity Futures Trading Commission (CFTC) sued the state of Arizona for trying to regulate prediction markets. The CFTC argued that it has “exclusive jurisdiction” to regulate “Designated Contract Markets (DCMs)”, which include prediction platforms under the Commodity Exchange Act (CEA). In 2025, gaming regulators in the state of Illinois sent cease and desist letters to prediction platforms claiming that the event contracts offered by the platforms violated state gambling laws and licensing requirements. State regulators expressed concern about these contracts which they viewed as unlicensed gambling. The CFTC argued that the CEA “provides a comprehensive regulatory framework for the regulation of derivatives transactions in the United States” and gives the CFTC “exclusive jurisdiction” over products like futures, options, and swaps listed on regulated exchanges. However, Arizona regulators, asserted that “[o]ffering or selling event contracts to persons located within Arizona without a license from the Department violates Arizona law.” 

On April 10, 2026, the court issued a temporarily restraining order blocking Attorney General Kris Mayes from regulating the industry. Arizona was then dismissed as a party to the lawsuit. The Arizona Attorney General’s Office continues to evaluate next steps.