The CFTC tells prediction markets to stop blocking states: what it means

The interpretation concerns Regulation 38.151(b), which requires a designated contract market — a CFTC-regulated exchange such as Kalshi — to give “competitive, open, fair, and impartial access” to eligible traders. The Commission’s view: “The CEA and Commission Regulations generally do not permit a DCM to limit access based on the location of an otherwise eligible market participant within the United States” (interpretation).

The deadline is in the press release, not the interpretation itself: “DCMs must cease domestic geographic restrictions that violate the Impartial Access Requirements within 30 days, or else submit to the Division of Market Oversight an explanation for why such compliance is not feasible.” Within the same 30 days, exchanges “should” ensure that intermediaries, the brokers and apps that route orders to them, are not imposing such restrictions either. CFTC Chairman Michael Selig: “Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements” (CFTC release 9323-26).

Thirty days from 5 November is 5 December 2026. The interpretation takes effect on publication in the Federal Register; it was filed for public inspection on 9 November and scheduled for publication on 10 November (FR Doc. 2026-22863). Its voting summary records that “Chairman Selig voted in the affirmative. No Commissioner voted in the negative.” Selig is the only commissioner listed on the CFTC’s website, of five seats.

The press release says the Commission “will consider the facts and circumstances of any particular case”. A footnote in the interpretation points to the CFTC’s power to seek an injunction against anyone “restraining trading in any commodity for future delivery or any swap”.

• Trapped positions: a trader who opens a position in one state and travels to a blocked one “would be unable to manage their position”, which can force liquidations.
• Worse prices for everyone: excluding states with many active traders or market makers “would reduce overall volume and lead to wider bid-ask spreads”.
• Lost local knowledge: the CFTC gives sports and elections as examples, where the most informed traders are often in the state concerned, such as fans of a home team or voters in a state race.
• A single national market: in its words, derivatives markets “must operate on a uniform basis at a national scale”.

The reasoning matters because it frames geofencing as a market-integrity problem under federal rules, not just a business choice. That is the same ground the CFTC is defending in court and in its October 2026 proposal to define event contracts as swaps.

Many of the state blocks the CFTC objects to were not the platforms’ idea. They were required by state courts or agreed with state regulators:

Sources: Nevada Gaming Control Board, Washington Attorney General, Michigan Attorney General, Michigan Gaming Control Board. Some platforms also exclude states on their own: Novig, for example, lists itself as unavailable in Arizona, Nevada, Michigan and Ohio (Novig).

The interpretation does not mention court orders, and it does not say what an exchange should do when a state court requires a geofence. A CFTC interpretation is the agency’s reading of its own rules; whether it changes what a state court can order is a question for the courts, the same preemption question already before the Supreme Court in New Jersey’s petition, No. 26-299. Every case is listed in our regulation tracker.

By 9 November we found no statement on the interpretation from a state regulator, attorney general or platform on their own sites. The first responses came in briefs filed on 6 November in Kalshi’s Second Circuit appeal against New York (No. 26-1835), and they disagree:

• Better Markets, a financial-reform group, wrote that “the CFTC directed prediction markets to defy this Court’s order or risk enforcement actions” (amicus brief).
• The American Gaming Association argued the impartial-access rule “addresses discriminatory access criteria, such as standards based on net worth, not geographic availability” (amicus brief).

No court had ruled on the interpretation by 9 November.

• Nothing yet. Each platform’s own location rules still decide whether you can trade where you are. Check its terms or our state-by-state pages before assuming a state has opened.
• An exchange could lift a voluntary block quickly. A court-ordered one carries penalties, so expect platforms to explain to the CFTC rather than defy a judge.
• Watch 5 December 2026, the 30-day deadline, and the first court filings that cite the interpretation.
• Positions you hold are governed by the platform’s rules in your state. If a state reopens or closes, the platform should say how open positions are treated, as Polymarket US did with Michigan’s 25 November close-out date.