On Nov. 6, the Commodity Futures Trading Commission issued an interpretation of Regulation 38.151(b), the rule that requires federally registered exchanges to offer “competitive, open, fair and impartial access.” Exchanges and the brokers that distribute their contracts now have 30 days to stop blocking US customers by state, or to explain to the CFTC’s Division of Market Oversight why they can’t.
Most coverage will treat this as the CFTC backing Kalshi. I’m more interested in the position it puts operators in. Many of the geoblocks the CFTC wants removed weren’t optional. Judges ordered them. Operators now have a federal regulator telling them to reopen and state courts telling them not to.
Key Takeaways
- The directive: Exchanges registered as designated contract markets (DCMs) must stop domestic geographic restrictions within 30 days, or explain why that isn’t feasible.
- Wider reach: Exchanges must also make sure brokers and apps that offer their contracts (Robinhood, Coinbase and others) aren’t blocking access.
- The CFTC’s reasoning: Chairman Michael Selig says derivatives markets “must operate on a uniform basis at a national scale.”
- The conflict: Kalshi currently blocks Nevada, Washington and Michigan, in some cases under court order.
- What it doesn’t do: It’s an agency interpretation, not a court order. It doesn’t dissolve any injunction.
- Deadline: Around Dec. 6, 2026, the day before Kalshi’s Supreme Court response is due on Dec. 7.
What the CFTC Said
“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,” CFTC Chairman Michael Selig said. “Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements.”
The release gives operators an option, however. It applies to restrictions that violate the impartial-access rules, lets exchanges explain why compliance “is not feasible,” and says the commission will consider “the facts and circumstances of any particular case” before acting. It doesn’t name any operator as being in violation or announce any penalties.
The watchdog group Better Markets was blunt, accusing the CFTC of directing platforms to defy court orders that require them to block residents of certain states from betting on sports.
Where Prediction Markets Are Currently Restricted
| State | Restriction | Source of restriction |
|---|---|---|
| Michigan | Kalshi sports contracts blocked; Robinhood and Coinbase stopped new sports contracts | State court preliminary injunction (Sept. 1) with a geolocation requirement |
| Nevada | Kalshi geofenced | State court injunction (May 18). Ninth Circuit denied rehearing this week |
| Utah | Kalshi pulled sports. DKeX and FanDuel Predicts restricted sports, politics and culture. Fanatics Markets withdrew more broadly | Criminal charges against Kalshi and its co-founders |
| California (tribal lands) | Kalshi barred from sports contracts on plaintiff tribes’ lands | Federal preliminary injunction under the Indian Gaming Regulatory Act (Judge Jacqueline Scott Corley) |
| Washington | Kalshi blocked | Ongoing litigation |
| New York / Connecticut | Second Circuit denied Kalshi and Coinbase injunctions pending appeal | Geofencing could follow |
| Illinois | Kalshi and Coinbase won a federal preliminary injunction (Oct. 30) | State has appealed |
The Problem for Operators
This is the part I keep coming back to. A CFTC interpretation doesn’t override a judge’s injunction. If Kalshi reopens Michigan to comply with the CFTC, it risks contempt of a state court order backed by a $500,000-per-day penalty. If it stays blocked, it has to tell its federal regulator why it isn’t following the national-access rule.
The CFTC’s “explain why” option is what makes this workable in practice. Expect most operators to send letters by early December pointing to the specific court orders they’re under. The bigger question is what happens where geoblocks were voluntary or partial, such as DKeX and FanDuel Predicts pulling politics and culture contracts in Utah. Those are much harder to defend as legally required.
The California order is a separate category. Judge Corley’s injunction rests on federal law, the Indian Gaming Regulatory Act, not state gambling law. The tribes must submit boundary maps by Nov. 13, and Kalshi has 21 days to file a compliance report. The CFTC release doesn’t say how its interpretation applies to an exclusion ordered under federal law.
Where the Courts Stand
| Court | Ruling | Result |
|---|---|---|
| Third Circuit (New Jersey) | Sided with Kalshi | Federal preemption |
| Ninth Circuit (Nevada) | Against Kalshi; rehearing denied this week | States can regulate |
| Sixth Circuit (Ohio, Tennessee) | Rejected preliminary protection (Sept. 25) | States can regulate |
| Second Circuit (NY, CT) | Denied injunctions pending appeal | Merits unresolved |
| N.D. Illinois | Granted Kalshi and Coinbase a preliminary injunction (Oct. 30) | Illinois appealing |
| U.S. Supreme Court | Petitions pending, none granted | Kalshi response due Dec. 7 |
The Ninth Circuit has already rejected the CFTC’s argument. It called Kalshi’s claim that state blocks and federal access rules must conflict a “false, all-or-nothing proposition.”
Why the CFTC Is Acting Now
The timing is notable. The directive came three days after Democrats won both chambers of Congress, including senators like Elizabeth Warren who accuse the CFTC of being too close to the industry. It also came while the CFTC and the Justice Department are in federal court trying to stop Utah’s criminal case against Kalshi.
My read is that the CFTC is trying to establish national access as the default before the Supreme Court decides whether to take the preemption question, and before a Democratic Congress can hold oversight hearings. If the justices decline the case, the CFTC still has a regulation saying state geoblocks break federal rules. If they take it, the CFTC has made its position clear.
Key Dates
| Date | Event |
|---|---|
| Nov. 6 | CFTC issues Regulation 38.151(b) interpretation |
| Nov. 13 | California tribes file boundary maps in the Kalshi injunction |
| ~Late Nov. | Kalshi’s California compliance report due (21 days from order) |
| ~Dec. 6 | CFTC 30-day deadline to unblock or explain |
| Dec. 7 | Kalshi’s Supreme Court response due in the New Jersey case |
What I’m Watching
The industry has spent the year arguing that one federal regulator should decide where prediction markets operate, not 50 states. On Nov. 6, that federal regulator agreed and set a deadline. But the courts disagree with each other, state judges have issued real injunctions, and Utah has charged Kalshi’s founders.
Operators have a month to decide which authority to follow. For most of them, the answer will be the one that can hold them in contempt. Until the Supreme Court rules, the CFTC’s directive is a strong statement of position more than a change in where people can actually trade.
FAQ: CFTC Geofencing Directive
What did the CFTC tell Kalshi and Polymarket to do?
On Nov. 6, the CFTC said federally registered exchanges must stop blocking US customers by state within 30 days, or explain to the agency why they can’t, under its impartial-access rule, Regulation 38.151(b).
Does the CFTC directive override state court orders?
No. It’s an agency interpretation, not a court order, and it doesn’t dissolve existing injunctions in states like Michigan and Nevada. Operators can explain to the CFTC that court orders prevent them from complying.
Which states block prediction markets?
Kalshi currently blocks or restricts Nevada, Washington and Michigan, has pulled sports contracts in Utah, and is barred from sports contracts on certain California tribal lands. Other operators have their own restrictions.
When is the CFTC deadline?
Thirty days from Nov. 6, so around Dec. 6, 2026, the day before Kalshi’s Supreme Court response is due in the New Jersey case.
