This is a federal powers matter. You don’t have to like “prediction markets” to understand this. States make a lot of revenue from licensed gambling, and the lobby funnels that to senators and governors. That tax is basically a license that lets them be the “house” and make money when you lose. Congress’ passed an Act in 2010 called “Dodd-Frank” prior to that “binary swaps” were primarily used on commodities, so farmers could hedge crop yields and things like that. Dodd-Frank expanded the definition of a swap to include *any*, and clarified that the CFTC had authority subjectively over event contracts and that only war, assassination, gaming, and illegal acts were expressly banned. That bill was voted for by many current members of Congress who are arguing against it, such as Bernie Sanders, Amy Klobuchar, Adam Schiff, Chuck Schumer and in 2018 even Elizabeth Warren fought against the bill to rollback Dodd-Frank. Now state governors want to pretend these things exist “outside the law” And Senators like Adam Schiff who take money from the gambling lobby argue it’s a “states rights issue” But it’s not. The Constitution has a “Supremacy Clause” States can regulate things that the federal government has not, and they can retain their policing powers, and opt out of enforcement of things at the state level (like they did in many places with marijuana) But what they cannot do is over rule or replace a federal law. If an Act of Congress gave authority to the CFTC - that’s it. The CFTC wins. Only a law in Congress can change that. No state governor, no state attorney general, and certainly no gambling commission can change that. It is a literal constitutional matter. The CFTC requires these exchanges to have fair access for party to party trading and regulate just like major commodities exchanges. That enforcement is stricter than state alternatives. So why do states care? Tax revenue. Federally regulated exchanges don’t pay a *state* tax. So even if you’re in the camp that thinks prediction markets shouldn’t be a thing, you have to understand the perverse incentives here. Multiple states, their governors, attorney generals and senators are trying to ignore the constitution, and sell out on protecting their citizens, to protect manipulative revenue from the gambling industry. And they know they can do it, because they can sell you a boogeyman story because people are sick of gambling. But somehow instead of talking about banning DraftKings, they’ve convinced you, they can ignore the constitution to go after anything they find “distasteful” It’s all about political points with populists and tax revenue from gambling. And no matter where you sit on that debate it’s important to see through the bs.