Share 
“Gambling, pure and simple,” is how Utah Gov. Spencer Cox describes prediction markets. The governor recently rejected the Commodity Futures Trading Commission’s (CFTC) claim of jurisdiction over the platforms and reaffirmed his vow to fight in court to keep them out of Utah.
Defining the prediction market controversy
Prediction markets allow users to buy and sell contracts based on the outcomes of future events, ranging from local elections to professional sports. Under federal law, these contracts are regulated by the CFTC as derivatives rather than as gambling, placing them largely beyond the jurisdiction of state authorities.
The industry is seeing explosive growth. According to reporting by the Deseret News, monthly trading volumes surged from approximately $100 million at the start of 2024 to more than $13 billion by the end of 2025. Platforms such as Kalshi, Polymarket, and Coinbase remain the dominant players in the space.
Federal preemption vs. state sovereignty
CFTC Chairman Michael S. Selig recently took to X (formerly Twitter) to defend the commission’s exclusive oversight. “Today the CFTC is taking an important step to ensure that these markets have a place here in America,” Selig wrote. “To those who seek to challenge our authority in this space, let me be clear: We will see you in court.”
Cox responded directly to the post on Tuesday: “Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds. These prediction markets you are breathlessly defending are gambling — pure and simple.”
While Cox argues for state sovereignty, the legal tide has been shifting. As noted by legal analysts at Holland & Knight, a federal court in Tennessee granted a preliminary injunction in favor of Kalshi on Feb. 19, 2026. The court ruled that sports event contracts are likely federally protected “swaps” that preempt state law, a significant blow to governors attempting to ban the platforms.
Utah Legislature targets proposition betting
The Utah Legislature recently moved to fortify its anti-gambling stance. According to legislative tracking via LegiScan, the House and Senate recently passed HB 243, a bill designed to clarify that “proposition bets” fall under the state’s constitutional ban on gambling.
Prop bets are wagers on specific in-game events or individual player statistics. While the bill’s primary targets are sports betting apps, legal experts warn it could trigger a “constitutional clash” if used to target prediction markets. The bill was sent for enrolling on Feb. 27, 2026, and is expected to be signed by Gov. Cox shortly.
