Washington, Mar 26: The US state of Idaho has joined a coalition of 39 states in a legal challenge over federal authority on certain sports-related betting products, amid a growing dispute on whether such activities fall under state or federal jurisdiction.
Idaho Attorney General Raúl Labrador announced the move, opposing the stance taken by the Commodity Futures Trading Commission (CFTC), which has argued that some event-based contracts tied to sports outcomes qualify as financial instruments.
The controversy centres on emerging platforms offering “event contracts” that allow users to speculate on outcomes such as match results and player performances. While these products are marketed as financial trades on regulated exchanges, several states contend they function similarly to sports betting.
Idaho and other states have argued that accepting the federal regulator’s interpretation could undermine state authority, particularly in regions where sports betting remains restricted or banned.
In a statement, Labrador said states must retain the right to regulate gambling within their jurisdictions, asserting that federal financial laws were not intended to override state-level gambling regulations.
The coalition has emphasised that gambling oversight in the US has traditionally been managed by individual states through licensing systems, consumer protection rules and enforcement mechanisms.
The legal dispute has gained prominence with the rapid expansion of platforms offering such contracts, including those linked to major sporting events.
These markets have seen significant activity in recent months, highlighting the regulatory grey area surrounding them.
Earlier, the CFTC had indicated that it had not formally approved such contracts and warned that state laws could still apply.
However, following a leadership change, the agency adopted a different position, arguing that these products fall under its exclusive jurisdiction as financial “swaps.”
If upheld, the federal interpretation could limit the ability of states to enforce their own.
