Continuing a legal battle between the different levels of state and federal government, and financial regulators in the US over who has ultimate jurisdiction to oversee the event contracts traded on Prediction Markets, US derivatives markets regulator The Commodity Futures Trading Commission (CFTC) has announced that the US District Court for the District of Arizona granted a temporary restraining order barring the state of Arizona from continuing to pursue criminal charges against CFTC-regulated designated contract markets. This follows the filing of a complaint against Arizona by the CFTC earlier this month, seeking an injunction barring Arizona from attempting to preempt federal law regarding Prediction Markets.

CFTC Chairman Michael S. Selig said,

“The CFTC appreciates the court’s careful consideration of these important legal questions and the court’s decision to preserve the status quo. Arizona’s decision to weaponize state criminal law against companies that comply with federal law sets a dangerous precedent, and the court’s order today sends a clear message that intimidation is not an acceptable tactic to circumvent federal law.”

As noted above, in early April the CFTC filed complaints against Arizona, Connecticut, and Illinois, seeking declaratory judgments that federal law grants the CFTC “exclusive authority” to regulate event contracts, and requesting permanent injunctions preventing the states from enforcing preempted state laws against DCMs.

The CFTC also filed a motion for a Temporary Restraining Order and Preliminary Injunction to prevent Arizona from enforcing preempted state laws against CFTC-regulated DCMs.