The CFTC gives prediction markets 30 days to unblock states that courts have ordered them to block

The Commodity Futures Trading Commission (CFTC) told US prediction markets on Thursday 5 November 2026 that they may not shut out traders because of the state they live in, and gave them 30 days to drop those geoblocks or explain why they cannot. The demand comes with an interpretation of Commission Regulation 38.151(b), announced in CFTC press release 9323-26. It lands on exchanges such as Kalshi, which block customers in several states today because judges told them to.

The text names no company. CoinDesk, which reported the clash on 6 November, says the guidance covers designated contract markets (DCMs) “including Kalshi and Polymarket”. Kalshi has geofenced customers in Nevada, Washington and Michigan, according to the same report, and a federal judge in California has ordered access blocked on some tribal lands.

“Derivatives markets must operate on a uniform basis at a national scale in order to achieve the purposes set out in the Commodity Exchange Act,” Chairman Michael S. Selig said in the release. “Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements.” Selig is the only sitting commissioner, CoinDesk notes, so the Commission acts on his decision alone.

The 30 days run to about 5 December. The release gives no calendar date. The guidance itself is marked effective on its date of publication, a date still left blank in the version the CFTC posted, so the exact end of the clock is not known yet. For a primer on how these exchanges work, see our guide to prediction markets, Polymarket, Kalshi and the law.

What the CFTC prediction markets guidance on state geoblocks requires

Regulation 38.151(b) says a DCM must give its members and anyone with trading privileges “competitive, open, fair, and impartial access” to its markets. The six-page interpretation reads that duty as a ban on most location tests inside the United States. The Commodity Exchange Act and the Commission’s rules “generally do not permit” an exchange to limit access because of where an otherwise eligible trader is located in the country, the text says.

The press release then sets two tasks, both with the same 30-day window. DCMs must stop domestic geographic restrictions that break the impartial-access rule, or send the Division of Market Oversight an explanation of why compliance “is not feasible”. They should also make sure that the intermediaries reaching their markets, the brokers and apps, are not getting in the way of impartial access, or explain why they cannot.

That second task matters for crypto readers. A footnote in the interpretation makes exchanges answerable for their brokers, and several crypto and trading apps sell event contracts in the US. Robinhood, Coinbase and Crypto.com all offer them in their apps, and Phantom opened Kalshi markets to its US wallet users in October.

No penalty is set. The Commission “will consider the facts and circumstances” of each case in connection with any action it takes, the release says. No exchange is cited and no enforcement case is opened.

Why the CFTC says a state map hurts markets

The text argues that a patchwork of state rules does damage. A trader who opens a position in a state where access is allowed and then travels to one where it is not cannot manage it or meet a margin call, which can force liquidations and leave losses with brokers and clearing houses. Cutting off states where market makers and other high-volume traders sit would mean less volume and wider bid-ask spreads, it says.

It gives sports and weather examples. A contract on whether a home team reaches its playoffs draws much of its interest from that region, so excluding the region drains liquidity; a weather contract that shuts out a storm-prone region removes the traders with the most reason to hedge. On politics it goes further. Election markets “may be particularly sensitive”, the text says, because the most informed trading on a state race may come from inside that state.

The interpretation opens by saying the Commission is aware that some DCMs restrict certain event contract markets by a trader’s location or residence. It never says why they do. Courts, state regulators and tribes do not appear anywhere in the six pages.

Kalshi is geofenced in at least three states after court rulings

Exchanges are being asked to undo what several courts have required. CoinDesk lists the rulings: the Second Circuit decided against Kalshi and Coinbase, which could open the way to enforcement in Connecticut and New York; a Michigan state court ordered trades reversed; and the Ninth Circuit found Kalshi likely to lose its claim that its contracts do not break tribal gambling law, after which a federal judge in California ordered access blocked in some tribal jurisdictions. Kalshi has told a federal court it geofenced the lands of the California tribes suing it, Regulatory Gaming reported.

Nevada came first. On Friday 28 August a unanimous Ninth Circuit panel found that the Commodity Exchange Act likely does not stop Nevada from enforcing its gambling laws against Kalshi, Crypto Briefing reported that day, adding that Kalshi had already stopped offering its products in the state.

Washington followed. King County Superior Court Judge John McHale ordered Kalshi in August to stop offering Washington users contracts on sports, elections, entertainment, culture, technology and science, with a full geofence due by 2 September or fines of $120,000 a day, OPB reported. Contracts on commodities, climate, economics and finance could stay.

Michigan shows how far the CFTC is willing to go. After Ingham County Judge Rosemarie Aquilina issued a temporary block in late June, Kalshi proposed cancelling pending trades of Michigan residents. The CFTC ordered it on a Tuesday in July to honour them instead, saying a registered exchange must operate as a “single national market” and that cancelling by state of residence would conflict with impartial access, CDC Gaming reported on 16 July. The state attorney general hit back.

Other platforms have pulled back too. Robinhood agreed to stop offering new sports event contracts in Ohio, and Polymarket US said it would halt new sports contracts in Michigan, according to Regulatory Gaming, which adds that Ohio’s casino regulator sent cease-and-desist letters to prediction markets and brokers in October. On 25 September the Sixth Circuit had already ruled that Ohio and Tennessee may apply their gambling laws to Kalshi’s sports contracts.

Utah is the bitterest front. Gambling is banned by its constitution, the state has a civil case against Kalshi and has filed criminal charges against the company and its two founders, and the United States and the CFTC have sued Utah to stop its case, as we reported in our piece on the federal suit against Utah.

No platform publishes a full list of the states it blocks, so the exact count is not known. The table holds only what the sources named in each row report.

Courts versus the CFTC: what “not feasible” may mean

The release leaves one way out: explain why compliance is not feasible. Neither the release nor the interpretation says whether a court order counts as such a reason. We found no published compliance plan from Kalshi or Polymarket by Saturday morning, and Kalshi’s spokesperson did not answer CoinDesk’s question about its plans before publication.

What follows is our own reading, analysis and not legal advice. An exchange that lifted a geofence ordered by a judge would seem to risk contempt of court, while one that kept it would be filing an explanation with a regulator that has just called the practice inconsistent with federal law. The document is an interpretation, not a rule adopted after public comment, and in our view courts are likely to weigh it for the strength of its reasoning rather than treat it as binding. Several appeals courts have already ruled that states may apply their gambling laws to Kalshi’s sports contracts. On that reading, the guidance strengthens the CFTC’s hand in its own supervision and in court briefs without overturning any state ruling.

Critics read it as defiance of the courts. Senator Adam Schiff (D-Calif.), who sits on the Senate Agriculture Committee that oversees the CFTC, wrote on X on Friday that the agency and its chairman appeared to be encouraging platforms to keep offering gambling products in breach of those court orders, CoinDesk reported. Better Markets, a financial reform group, told CoinDesk the rulings were clear and called the CFTC’s position baseless.

The national-market argument is not new: the agency made it in July’s Michigan order. What is new is the deadline, and the duty placed on exchanges to police their brokers.

What Congress and the Supreme Court can still do

The higher arbiter is the Supreme Court. New Jersey lost before the Third Circuit on 6 April 2026, when that court ruled the state could not enforce its gambling law against Kalshi’s CFTC-regulated sports contracts, and petitioned the Court on 2 September in Flaherty v. KalshiEX. The NFL, Ohio and 38 other states plus the District of Columbia filed briefs urging the Justices to hear it, as we covered in our report on the NBA pact and the NFL’s Supreme Court brief. Kalshi’s answer is due on 9 November. With the Third Circuit on one side and the Sixth and Ninth on the other, the appeals courts are split, the situation the Court is usually asked to resolve.

Our reading again, not a forecast from any source: a Supreme Court ruling for the states would leave little of the new guidance standing for sports contracts, while a ruling for Kalshi would give the CFTC’s national-market view the backing of the highest court.

Congress is the slower route. The STOP Corrupt Bets Act, announced on 26 March 2026 by Representative Jamie Raskin and Senator Jeff Merkley, with Senators Elizabeth Warren, Richard Blumenthal, Chris Van Hollen and Sheldon Whitehouse as cosponsors, would bar event contracts on elections, government actions, sports and military action, according to Raskin’s office, with room for commercial hedging on government actions. It is still in committee and is background here, not news of this week. Raskin said then that “government is an instrument for the common good and not a casino.”

The midterms change who asks the questions. Democrats won the House and a Senate majority on 3 November, and Warren is expected to chair Senate Banking from January, as set out in our analysis of what the Democratic sweep means for crypto bills. The CFTC answers to the Agriculture committees, though, where Schiff sits. Our view, not a sourced forecast: a ban still needs 60 Senate votes and a presidential signature, so oversight letters and hearings look like the likelier tools from January.

What it means for traders, and the dates to watch

For a US trader in a blocked state, nothing changes today. The geofences stay until an exchange lifts them, and the court orders behind them remain in force. For traders elsewhere in the US, the guidance is a signal that the CFTC wants one national market, the model Kalshi defends in its fight with the states and which our Kalshi project profile follows. It applies to CFTC-registered exchanges and the brokers that reach them, and to access from inside the United States.

The calendar is short. Kalshi files at the Supreme Court on 9 November, the day the Senate returns. Comments on a separate CFTC rule that excludes licensed sportsbook bets from the blockchain, where users swap tokens directly from their own wallets without handing custody of their funds to a company.">swap definition are due on 18 November, according to Regulatory Gaming. The 30-day window ends around 5 December, depending on the publication date, and the Court has not said when it will decide whether to take the New Jersey case.

The first test is the explanations exchanges send the Division of Market Oversight by that deadline, and whether any of them cites a court order as the reason a national market is “not feasible”.