A coalition of 40 states has urged the Commodity Futures Trading Commission (CFTC) to leave sports-related prediction markets under state gambling oversight. In a letter dated April 30, 2026, the attorneys general argued that these markets function as wagers, akin to traditional sportsbook bets, rather than financial derivatives. They emphasized that the CFTC lacks authority over these contracts, which involve betting on game outcomes and player statistics. The states' pushback comes amid legal battles over federal preemption in gambling regulation. Recent court rulings, including a preliminary injunction for Kalshi in Tennessee, have intensified the debate. The states warned that CFTC oversight could undermine protections against gambling risks, such as addiction and insider betting, which are traditionally managed at the state level. The letter was signed by attorneys general from 40 states and the District of Columbia.