Idaho Attorney General Raúl Labrador has officially joined a powerhouse coalition of 39 states to challenge what they describe as a “major overreach” by the Commodity Futures Trading Commission (CFTC).
The legal dispute centers on the CFTC’s attempt to claim federal authority over sports betting by classifying wagers as “event contracts” on regulated futures exchanges.
Defending State Sovereignty
For decades, gambling regulation has been the exclusive domain of individual states, which have built robust systems for licensing, age verification, and addiction support. The states argue that the CFTC—which has admitted it lacks expertise in gambling—is attempting to discover “hidden authority” in 15-year-old financial laws passed after the 2008 crisis.
Raúl Labrador issued a stark warning regarding the constitutional implications:
“An unelected federal agency claims it discovered hidden authority… to override state gambling laws nationwide. Congress never granted that power, and Idaho will continue defending our right to regulate gambling as we see fit.”
The Ninth Circuit Battle
The case is currently before the Ninth Circuit, following litigation involving Nevada’s enforcement of its own laws against prediction markets. The coalition’s brief emphasizes that federal agencies cannot define the limits of their own power. Under Supreme Court precedent, clear Congressional authorization is required for an agency to expand into major policy areas like gambling.
Labrador noted that if the CFTC’s theory holds, even states like Idaho that choose to ban sports betting would be prevented from enforcing those bans. The coalition is urging the court to reject the CFTC’s position to preserve the balance of power between state and federal authorities.
