CFTC Files Amicus Brief Asserting Exclusive Jurisdiction over Prediction Markets, United States, February 2026

On February 17, 2026, the Commodity Futures Trading Commission filed an amicus curiae brief in the United States Court of Appeals for the Ninth Circuit in North American Derivatives Exchange, Inc. et al. v. Nevada Gaming Control Board et al. The CFTC filed the brief at the appellate stage, urging the court to affirm that federal commodities law preempts state gaming regulation of CFTC-registered prediction market contracts. The filing is a formal assertion of exclusive federal jurisdiction over event-based derivatives traded on designated contract markets.

The CFTC grounded its jurisdictional claim in the Commodity Exchange Act, 7 U.S.C. § 1 et seq., as amended by the Commodity Futures Modernization Act of 2000 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Section 2(a)(1)(A) of the CEA vests the CFTC with exclusive jurisdiction over transactions in commodity interests, including contracts of sale of a commodity for future delivery. The Commission's brief argued that event contracts meeting the definition of commodity interests under CEA Section 1a(9) fall within this exclusive federal grant, and that no state gaming, lottery, or gambling statute may restrict, condition, or prohibit their operation on a CFTC-registered exchange. The CFTC noted that federal preemption of state gaming laws over exchange-traded event contracts has been the operative legal position since the Iowa Electronic Markets received CFTC no-action treatment beginning in 1992.

The CFTC's filing directly affects three categories of market participants. CFTC-registered designated contract markets offering event contracts — including currently active platforms — may cite the brief as authoritative agency position in any state proceeding that seeks to apply gaming licensing or prohibition laws to their operations. State gaming control boards in Nevada and other states that have initiated or threatened enforcement actions against prediction market operators must weigh whether continued state-level proceedings are defensible under federal preemption doctrine. Non-registered platforms operating prediction markets outside the CFTC's DCM regime cannot claim the preemption shield the brief describes, and remain exposed to state gaming regulation until and unless they obtain CFTC registration or a formal exemption.

The Ninth Circuit has not yet issued its ruling. Nevada Gaming Control Board and co-defendants remain parties to the litigation and may file responsive briefs contesting the preemption argument. A circuit court decision upholding the CFTC's position would bind federal courts in the Ninth Circuit and create persuasive precedent elsewhere, while an adverse ruling could fracture the uniform federal regulation model the CFTC has maintained for exchange-traded event contracts. The CFTC's amicus filing does not carry the force of a final rule or adjudication and binds no court.

Prokopiev Law Group advises prediction market operators, event contract platforms, and regulated exchanges on CFTC compliance and related state law exposure, and maintains a dedicated partner network for matters requiring specialized derivatives regulatory counsel. Contact us to discuss how this development affects your operations. Areas we handle and assign through our network include: prediction market licensing, DCM rule design and compliance, event contract structuring, CFTC registration, state preemption analysis, and derivatives regulatory counsel.

Source: CFTC Press Release No. 9183-26, "CFTC Reaffirms Exclusive Jurisdiction over Prediction Markets in U.S. Circuit Court Filing," February 17, 2026, https://www.cftc.gov/PressRoom/PressReleases/9183-26. Confirmed March 26, 2026.

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