The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Kentucky, challenging the state's regulatory actions over prediction markets. This legal move comes after Kentucky sued platforms like Kalshi and Polymarket for allegedly operating without a state license. The CFTC's complaint, lodged in the U.S. District Court for the Eastern District of Kentucky, argues that Kentucky's actions infringe on federal regulatory authority over the national swaps market. The CFTC also criticized Kentucky's 14.25% tax on prediction market transaction fees, claiming it hinders market operations within the state. Kentucky is now the ninth state to face a lawsuit from the CFTC, joining others like Wisconsin and New York, as the federal agency seeks to assert its regulatory primacy.