Red- And Blue-state AGs Band Together For Antitrust And Consumer Protection

(May 14, 2026) - Elyse D. Echtman of Steptoe LLP examines recent enforcement efforts in antitrust, social media and prediction markets, where state Attorneys General in red and blue states are seeking more stringent consumer protection standards than the federal government.

State Attorneys General possess broad parens patriae power to protect their constituents. Some of that power is exercised in areas traditionally within the states' domain, but much of it overlaps with authority held by the federal government. In 2026, we have seen remarkable clashes between state and federal regulators, where state Attorneys General have stepped in to pursue more rigorous consumer safeguards.

Attorneys General are banding together to flex their muscle through multistate coalitions. They're also filing follow-on lawsuits in their own state courts that capitalize on actions brought by other states.

Here, we examine some recent enforcement efforts in antitrust, social media and prediction markets, where state Attorneys General in red and blue states are seeking significantly more stringent consumer protection standards than the federal government.

Antitrust. In March 2026, the federal government approved a combination of the two largest local broadcast television station owners in the U.S, allowing Nexstar to acquire TEGNA. The transaction passed a Department of Justice (DOJ) antitrust review and the Federal Communications Commission's Media Bureau approved the necessary broadcast license transfers.

Nexstar and TEGNA consummated their transaction on March 19, 2026, immediately after receiving the green light from the federal government.

One day prior, on March 18, 2026, the States of California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia sued Nexstar and TEGNA in a California federal district court to block the deal as violative of federal antitrust law. DIRECTV brought the same claims in the same court on the same day.

The lawsuits allege that this combination will drive up the cost of television service to tens of millions of Americans, shutter local newsrooms around the country, substantially reduce competition in dozens of local markets and harm consumers.

The states and DTV moved for injunctive relief on March 20, 2026. The district court granted a Temporary Restraining Order to DTV on March 27, 2026, requiring that the entities be held separate, notwithstanding that the deal had closed. The court found a likelihood of success on the merits for a violation of Section 7 of the Clayton Act.

After consolidating the two actions, on April 17, 2026, the Court issued a preliminary injunction continuing the hold-separate requirements. Nexstar and TEGNA appealed the preliminary injunction order to the 9th U.S. Circuit Court of Appeals, filing a notice of appeal on April 21, 2026.

With the lawsuit gaining traction, additional Attorneys General, including some from the other side of the aisle, joined the case. An amended complaint filed on April 30, 2026, includes Indiana, Kansas, Massachusetts, Pennsylvania and Vermont as plaintiffs.

The Live Nation case represents another instance where Attorneys General sought greater antitrust protections than the federal government. In May 2024, the United States, along with a broad coalition of state Attorneys General, commenced an antitrust action against Live Nation and Ticketmaster in the Southern District of New York.

The case went to trial before a jury on March 2, 2026, with the Department of Justice in the lead. On Sunday, March 8, 2026, the U.S. informed the district court that it had reached a settlement. The states reported that they were not invited to the settlement discussions.

According to a mistrial motion filed in the case, DOJ informed the states of the settlement terms on March 5, giving them one day to decide whether to participate. A handful of states elected to join the deal. The remaining 33 states and the District of Columbia continued with the trial, bringing in Winston & Strawn to take the lead in the courtroom. On April 15, 2026, the jury entered a verdict in the states' favor.

Online games. A number of state Attorneys General have taken enforcement action against Roblox, an interactive virtual playground, arising out of alleged failures to protect young children from online predators, and sexual and violent content. The Federal Trade Commission, which similarly holds broad consumer protection powers, has not pursued litigation against the company.

Instead of joining together in these enforcement proceedings against Roblox, the states are pursuing parallel paths for redress in their respective jurisdictions. Attorneys General in various states have state court actions pending against Roblox asserting similar consumer protection claims. The gravamen of these complaints is that Roblox advertises its platform as safe for young children, while it allegedly knows that the site attracts child predators and hosts online "experiences" featuring shockingly offensive content from third-party developers.

The states claim that Roblox willingly failed to implement basic child-protection measures. Roblox denies any wrongdoing and asserts that it has advanced safeguards that monitor its platform for harmful content and communications.

In April 2026, Alabama, Nevada and West Virginia entered into nearly identical pre-litigation settlements with Roblox. In addition to Roblox paying millions of dollars to each state ($12.2 million for Alabama, $12.5 million for Nevada and $11.5 million for West Virgina), Roblox agreed to implement additional child-protection measures.

Prediction markets. The sharpest clash between state Attorneys General and the federal government may be taking place in the context of prediction markets. A number of state Attorneys General are seeking to shut down what they characterize as unlicensed sports gambling operations by Kalshi and other companies trading sports event contracts.

The Commodity Futures Trading Commission (CFTC) is fighting back to enjoin state enforcement actions, claiming exclusive jurisdiction over these contracts under the Commodity Exchange Act (CEA).

The CFTC filed separate federal court suits against a number of states to halt their enforcement actions against Kalshi and others. In Arizona, the CFTC obtained an injunction from a federal district court judge blocking the Arizona Attorney General's effort to arraign Kalshi on criminal gambling charges.

The CFTC's litigation duplicates actions that Kalshi commenced on its own behalf. Kalshi has been responding to state enforcement efforts with federal complaints seeking injunctive relief. In an unusual move, the CFTC effectively joined forces with Kalshi in civil litigation to emphasize its support on preemption. In Tennessee, Kalshi obtained its own preliminary injunction against state regulators on preemption grounds, which Tennessee appealed to the 6th U.S. Circuit Court of Appeals.

The 3rd Circuit is the first Circuit Court of Appeals to address preemption for sports event contracts. In April 2026, it squashed New Jersey's enforcement efforts, in KalshiEX, LLC v. Flaherty, finding exclusive CFTC jurisdiction.

But, the courts are divided on the CFTC's authority. In 2025, a Nevada district court judge ruled against preemption in cases involving Kalshi and other similar operators. In that court's opinion, sports event contracts do not qualify as "swaps" under the CEA, and do not fall within the CFTC's exclusive jurisdiction.

A Nevada state court judge subsequently enjoined Kalshi's sports offerings in Nevada. In Ohio, a federal court refused to shield Kalshi from that state's enforcement efforts, as did a Maryland federal court.

In January 2026, a Massachusetts state court judge granted the Massachusetts Attorney General a preliminary injunction against Kalshi. That court found, in Massachusetts v. KalshiEX LLC, that gambling regulation falls within the state's historic police powers, and outside of the scope of the CEA.

Kalshi appealed the Massachusetts injunction. In a broad show of support for Massachusetts, the Attorneys General for 37 states and the District of Columbia submitted an amicus brief supporting states' rights to regulate gambling. According to the states, "Kalshi's aggressive theory of preemption threatens the States' longstanding ability to protect their citizens in this area."

The Supreme Judicial Court of Massachusetts held oral argument on the appeal on May 4, 2026. Kalshi's attorney argued that these event contracts are derivatives within the CFTC's jurisdiction and that they are "fundamentally different" from a bet.

This preemption issue is teed up at the 9th Circuit, which held oral argument on April 16, 2026. The 4th Circuit held oral argument on the same issue on May 7, 2026. If the 9th or 4th Circuit splits with the 3rd Circuit, it's likely that the question will land at the U.S. Supreme Court for resolution.

Conclusion

The federal government and the states oftentimes differ on their antitrust and consumer protection enforcement priorities and standards. State Attorneys General are proactively shaping policy in the areas that matter for their states, regardless of whether they have the federal government on their side.

Originally published by Reuters.

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