CFTC sues Utah, its tenth state, over prediction markets as Reuters says the agency is also probing whether Polymarket broke its 2022 settlement

The Commodity Futures Trading Commission sued the State of Utah on Tuesday, asking a federal court to stop the state from shutting down prediction markets that are registered with the agency. The suit, filed in the US District Court for the District of Utah, names Attorney General Derek Brown, The Block reported. Utah had sued Kalshi, calling the platform a "public nuisance" and alleging it offered illegal gambling on sports, elections and politics.

CFTC Chairman Michael S. Selig said in the release that "Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets." The agency said it has already started proceedings against nine other states and filed briefs in four federal appeals courts and one state supreme court.

The case lands on the same day Reuters reported that the CFTC is again looking at Polymarket. Citing two people familiar with the matter, Reuters said investigators are reviewing how the platform determined where its customers were located and whether it kept Americans off its offshore site, as it agreed to do in a January 2022 settlement that carried a $1.4 million penalty. The CFTC, Polymarket and the Justice Department all declined to comment, according to Unchained's account; Reuters noted that an investigation does not necessarily point to wrongdoing.

Utah's attorney general's office did not immediately respond to The Block. The dispute between Washington and the states could end up at the Supreme Court.