Coinbase borrows Kalshi’s playbook, sues three states over prediction markets

Coinbase has filed lawsuits against regulators in Connecticut, Illinois, and Michigan in an effort to secure federal protection for its planned prediction markets. The exchange is asking federal judges to declare that these markets, when listed on a CFTC-regulated platform, fall exclusively under the Commodity Exchange Act (CEA) and the CFTC's jurisdiction, rather than being subject to 50 separate state gambling codes. Coinbase argues that allowing individual states to define federally supervised markets as illegal gambling would invert the system of federalism, making the most restrictive state standard the national rule. The company distinguishes its neutral matching engine markets from traditional sportsbooks, which profit from customer losses. This legal challenge mirrors the strategy used by Kalshi, which has faced mixed results in its own legal battles across several states regarding whether its event contracts are CFTC-regulated derivatives or unlicensed gambling. The combined legal actions may force federal courts to definitively rule on whether US prediction markets will be treated as regulated financial instruments or as gambling products governed by state law.

(Source：Cointelegraph)