CFTC Gives Prediction Markets 30 Days to End State Geoblocks

30 Days to Lift Geoblocks

The Commodity Futures Trading Commission (CFTC) told federally registered prediction markets on Thursday they can no longer bar traders based on the state they live in, giving designated contract markets (DCMs) 30 days to remove the restrictions or explain in writing why they cannot. The interpretation, issued under the impartial access provisions of Commission Regulation 38.151(b), applies to every registered DCM rather than a single company, so event-contract platforms such as Kalshi and Polymarket both fall inside its scope. It took effect upon publication in the Federal Register.

The order sets two obligations on the same 30-day clock. A DCM must stop domestic geographic restrictions that violate the impartial access requirement, and it must ensure brokers and other intermediaries that route customers to the exchange impose no blocks of their own. An exchange that cannot comply must file a written explanation with the CFTC's Division of Market Oversight; the guidance does not say what the agency will do with such filings, only that any future action will weigh the facts of each case.

Chairman Mike Selig framed the move as market structure rather than states' rights: derivatives markets must operate on a uniform national standard to achieve the purposes of the Commodity Exchange Act, and geographic access limits are incompatible with that standard. Selig leads the commission effectively alone, as only one Republican commissioner currently holds a seat, making the guidance a unilateral act.

The six-page document also lays out the harms the agency sees in geoblocking. A trader who opens a position in a permitted state and then travels into a blocked one may be unable to manage that position or meet a margin call. Excluding whole states fragments liquidity and widens spreads. The guidance cites sports contracts tied to a home team's playoff chances and election markets, where the sharpest trades often come from residents who vote in the contested contests.

Court Orders Point the Other Way

The guidance landed one day after a federal court demanded the opposite. On November 4, US District Judge Jacqueline Scott Corley granted a preliminary injunction sought by California tribes including Blue Lake Rancheria, barring Kalshi from offering any sports contracts on tribal Indian lands in the state. The tribes must submit maps of the affected lands to Kalshi by November 13, and the platform has 21 days to report its compliance.

Other jurisdictions are pressing too. In Michigan, a state court injunction already requires Kalshi to geofence its users, with violations carrying fines of $500,000 per day. The Ninth Circuit Court of Appeals, which heard Kalshi's Nevada case, rejected the company's fair-access argument as a false, either-or proposition and sent the tribal dispute back to a California federal judge. On the same day Corley ruled, Arkansas Attorney General Tim Griffin sued Kalshi under the state's Deceptive Trade Practices Act. The CFTC, for its part, has sued Utah to stop the state from applying its gambling laws to federally regulated prediction markets; Utah, which bans gambling in its constitution, has pursued both tracks, filing 14 criminal charges against Kalshi and two co-founders in late October. The timeline shows a dispute escalating in steps: the Ninth Circuit ruled against the CFTC in the Nevada case in late August, appellate courts in Ohio and Tennessee held that event contracts are not futures swaps in late September, and Utah's criminal charges followed in October. Political pressure arrived on Friday, when California Senator Adam Schiff, whose committee oversees the CFTC, posted on X that the agency and its chairman appear to be encouraging platforms to keep offering gambling products in open defiance of court orders. Consumer group Better Markets called the recent rulings a string of clear and firm decisions and said the CFTC's position is untenable. Kalshi had not responded to a request for comment on its compliance plans. The commercial stakes are large: Kalshi's valuation climbed from $22 billion to $40 billion during the year as prediction markets became exchanges' fastest-growing business, and every state ban cuts a block of liquidity from a model whose only moat is liquidity.

Which Order Wins First

Our reading: the two instruments are not equal in force. An interpretive guidance needs no formal rulemaking, which makes it fast but easier to overturn in the next lawsuit, while court orders bind directly and can be enforced. Kalshi's most defensible path is to answer both: file the infeasibility notice with the Division of Market Oversight by the deadline and simultaneously ask federal courts to stay the geoblock orders. The stress test arrives in early December, when the 30 days run out; if an exchange is then defying a regulator and a court at once, enforcement priority becomes the live question. A circuit split is already visible, the kind of conflict only the Supreme Court tends to settle, so the compliance map will likely be drawn case by case until then.