Published: November 9, 2026 | Author: Roxy Vance
The Commodity Futures Trading Commission (CFTC) has told the US exchanges it regulates, including prediction markets, that blocking users by state breaks its rules, and given them 30 days to stop or explain why they can’t. The interpretation, issued on November 5, 2026, matters because several exchanges and brokers have agreed with state regulators, or been ordered by courts, to keep certain contracts away from users in some places.
What the CFTC Said
The guidance covers designated contract markets (DCMs), the exchanges the CFTC registers, and their duty to give eligible traders open and impartial access. It says the Commodity Exchange Act (CEA) and CFTC rules generally do not allow a DCM to limit access based on where an otherwise eligible trader is located within the United States. Allowing traders in one state while barring those in another “excludes otherwise eligible individuals,” according to the guidance.
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. Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements.
Michael S. Selig, CFTC Chairman
Within the 30 days, exchanges must stop domestic geographic restrictions that break the rules, or explain to the CFTC’s Division of Market Oversight why they can’t. They should also make sure brokers and other intermediaries that reach their markets aren’t blocking users by location. The CFTC said it will weigh the facts of each case before deciding on any action.
The guidance document gives its reasons. A trader who opens a position in a state where access is allowed and then travels to a blocked state may be unable to manage it or meet a margin call, which can lead to forced liquidations. Excluding a region can also drain liquidity from contracts with local interest, such as whether a home team reaches the playoffs, and from state election markets.
Where It Collides With the States
The release and the guidance do not mention state gambling laws, court orders or any state by name. But some of the restrictions it describes were demanded by state regulators and courts.
In Ohio, Robinhood Derivatives agreed on October 26 to stop offering new sports contracts by November 2, after a cease-and-desist letter from the state’s casino regulator. Coinbase has agreed to stop as of November 13, the regulator told Legal Sports Report, in an article republished by CDC Gaming. Robinhood’s quarterly filing says certain exchanges and brokers have made similar agreements in certain states while lawsuits run.
In California, a federal judge on November 4 barred Kalshi from offering sports contracts on the lands of two tribes, and gave the tribes until November 13 to send Kalshi maps of their boundaries. The same day, the Ninth Circuit left in place its ruling that federal law likely doesn’t override Nevada’s gaming laws for Kalshi’s sports contracts.
Utah has charged Kalshi and its co-founders with felony gambling offenses, Deseret News reported. The US government and the CFTC have sued Utah, asking a federal court to declare its laws preempted for trades on CFTC-regulated exchanges.
What It Means for Players
Nothing changes overnight. The 30 days run from the November 5 release, and an exchange can answer with an explanation instead of lifting its limits. Agreements with state regulators and court orders that keep sports contracts away from some users remain in place for now, and the guidance doesn’t address them.
For people in states that treat these contracts as illegal gambling, the guidance sets the federal regulator’s position directly against that of state officials. Our sports betting guide covers the sportsbooks licensed by the states.
What Happens Next
Exchanges and their brokers have 30 days from November 5 to change their access rules or explain themselves to the CFTC. Kalshi must also report to the California court within 21 days of the November 4 order on the steps it has taken to comply.