Democratic attorneys general this week filed their 100th lawsuit against the Trump administration, part of a coordinated legal strategy. 

And the attorneys general say they are winning most of their court cases against the administration. Of the 67 cases with court rulings, the Democratic Attorneys General Association says its members have won 55 of those challenges. 

A legal challenge over environmental regulations filed this week is the AGs’ latest effort to oppose the ever-widening power of the executive branch. Since the president’s second term began last January, Democratic-led states have sued the administration on a variety of issues — ranging from the withholding of congressionally approved funds to immigration enforcement to the administration’s tariffs on foreign goods. 

Marking its 100th lawsuit, the Democratic Attorneys General Association said its members were the only group of elected leaders successfully opposing the Trump administration’s “harmful and reckless actions.”

“For too long, Trump has trampled the rule of law,” Sean Rankin, the association president, said in a news release. “And Democratic AGs have held him accountable for the harms he has done to our economy and our democracy.”

On Tuesday, a group of state and local governments sued over the administration’s repeal of limits on emissions from coal- and oil-fired power plants. The coalition argued the rollback was unlawful, saying the federal government has failed to provide a reasoned basis for it or consider the new technologies. The Trump administration has said the move was made “to ensure affordable, dependable energy for American families.” 

While it’s not unusual for states to sue the federal government, it’s one of the few paths Democrats have available to oppose President Donald Trump’s actions, with Republicans controlling the White House and both chambers of Congress.

Oregon Democratic Attorney General Dan Rayfield has been among the most prolific, suing the administration more than 50 times. Rayfield has said the suits are not political theater — they’re a vital means to checking the president’s overreach.

“People should be shocked that Oregon has filed 55 lawsuits,” he told Stateline earlier this year. “Their mind should be blown. But their mind should be equally blown at how often we’re winning these cases.”

State lawsuits represent a slice of the more than 700 lawsuits the Trump administration has faced since last January, according to a New York Times tracker. In more than 400 cases, the courts have let the administration’s policies stay in effect even as they remain in active litigation. But in more than 150 cases, the tracker shows the courts have at least partially halted administration policies. 

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org. 

As the United States of America marks its 250th anniversary this year, the relationship between the states and the federal government is approaching a breaking point.

Led by a bellicose president, the executive branch has moved to dominate states, resulting in more than a year of escalating confrontations between the two levels of government.

President Donald Trump has worked quickly: In the first year of his second term, he surged thousands of immigration enforcement agents into a resistant Minneapolis and other cities, with fatal results. He seized control of the National Guard in some states against the will of governors.

His administration is trying to force states to turn over sensitive data on millions of voters ahead of the midterms. And it is blocking states from receiving, and distributing to their residents, billions of federal dollars for child care, public health, housing and a host of other congressionally approved programs.

Political parties have swung in and out of power in Washington for centuries, and recent administrations have increasingly clashed with states run by the other party. This time is different, dozens of sources in and around government told Stateline.

Trump and a coterie of loyal aides have set out to remake the nation in the president’s image. Along the way, retribution and raw power have become the administration’s primary tools to bend recalcitrant states to its will. Grants are pulled, armed force deployed, disaster aid withheld.

The states have repeatedly gone to court, asking the federal judiciary to rein in the executive branch. They have also started testing the bounds of their own authority, such as moving to restrict the actions of federal immigration enforcement agents.

The past year has led to a period of sustained state and federal conflict without parallel in modern U.S. history. The consequences for Americans over time will prove enormous, shaping the very nature of our government.

“This kind of battle between the federal government and the states, we’ve just never seen that before and it makes no sense,” said former New Jersey Gov. Christine Todd Whitman, who was elected as a Republican but later helped co-found the centrist Forward Party.

Tensions between the states and the central government are as old as the nation itself. Alexander Hamilton famously favored a strong central government, while James Madison offered the Bill of Rights — including what became the 10th Amendment, which reserves for the states and the people those powers not delegated to the federal government.

But current strains are testing the bedrock principles of federalism, the uniquely American system created by the framers of the Constitution of power sharing between Washington, D.C., and the states.

Ahead of the 250th anniversary of the country’s founding on July 4, Stateline is exploring how the Trump era is transforming the relationship between the states and the federal government. This article is the first in an occasional series, The 50 vs. The One, that will examine the current fraught moment and what evolving — and often deteriorating — state-federal ties mean for the country, now and in the future.

In interviews and public remarks, current and former elected officials at all levels of government, as well as experts on American government, have described the country as approaching a pivot point. Trump’s second term could mark a defining moment for American federalism, one that will be studied in history books alongside Reconstruction, the New Deal and the Civil Rights Movement.

The United States will either continue to adhere to the principles of federalism, they say, or it will take a significant step toward a more powerful central government that sidelines the states.

“We are in a period of challenged federalism,” said Lisa Parshall, a federalism researcher and political science professor at Daemen University near Buffalo, New York. “The fact that we’re here talking about federalism tells you something about the current state of American politics.”

Dramatic changes in a year

Fears of diminishing state authority have animated state officials over the past year. Republican lawmakers in Utah have invested in federalism education and expanded a group to assess state-federal boundaries, for instance.

In July, Minnesota Gov. Tim Walz and Kansas Gov. Laura Kelly, both Democrats, publicly abandoned the nonpartisan National Governors Association, in part because they said the organization was not doing enough to protect states’ rights.

States are “laboratories of democracy,” Kelly said during an interview in February, using a classic civics textbook description. States have traditionally operated with relative freedom to pursue their own agendas and solutions to the challenges they face. In turn, states learn from one another.

“That’s been the beauty of it,” Kelly said. “If that’s to go away, if the federal government were — and they are, at this point — undermining states’ authority and responsibility, I think you end up slowing down the entire country.”

In the same way the three branches of government — the legislative, the executive and the judicial — provide checks and balances on one another, federalism imposes a state check on federal power. The U.S. Constitution, which went into effect in 1789, ensured states would command broad power over local commerce, policing, elections and other matters within their borders.

But Trump has at times raised doubt about whether he will always follow the Constitution and has claimed that he can ignore some of its requirements.

Last spring, Trump replied “I don’t know” when asked whether he needed to uphold the U.S. Constitution in the context of due process for immigrants. In 2022, he said massive election fraud allows parts of the Constitution to be terminated. And after his 2020 election defeat, he urged then-Vice President Mike Pence not to certify the results, even though the vice president has no constitutional authority to do so.

In February, Trump asserted that “states are just an agent of the federal government” as he called to “nationalize” elections. Under the Constitution, the responsibility of running elections belongs to the states.

Trump’s critics fault the Republican-controlled Congress for failing to challenge his sweeping assertions of executive power. His administration’s efforts to withhold from states billions in dollars appropriated by Congress, for instance, have spurred relatively little outrage among GOP lawmakers.

“What I think we’re seeing now is a whole different system of crushing state and local government,” said U.S. Rep. Emanuel Cleaver, a Missouri Democrat who has been in Congress since 2005. “And bowing down to a new system where we are almost living in a one-person government.”

In response to questions from Stateline, White House spokesperson Davis Ingle said in a statement: “The Trump Administration faithfully upholds our Constitution and the immortalized American principles of federalism, the rule of law, and the separation of powers.”

Trump and his allies have cast the president as a heroic figure capable of smashing through the machinery of government to achieve results on behalf of his voters and at the expense of his enemies. “For those who have been wronged and betrayed … I am your retribution,” he said in 2023.

He has at times taken steps that his supporters argue empower states, including effectively gutting the U.S. Department of Education, which Republicans have long accused of federal overreach. His appointments to the U.S. Supreme Court during his first term helped cement a conservative majority that in 2022 returned the issue of abortion access to the states.

In a statement, the Republican Governors Association told Stateline the current administration trusts governors to run their own states.

“By cutting government bureaucracy and unnecessary red-tape, President Trump is empowering governors to make decisions that best serve their individual states,” wrote Kollin Crompton, an RGA spokesperson.

Scrambled identities

The U.S. Constitution has been gradually amended in ways that have limited state power, most importantly through amendments that abolished slavery, required states to treat their citizens equally under the law, and prohibited states from denying suffrage on the basis of race and sex.

The federal government has also expanded its reach through legislation. President Franklin Roosevelt’s New Deal in the 1930s and President Lyndon Johnson’s Great Society in the 1960s imposed new economic regulations and created a federal social welfare apparatus that touches nearly every American.

Over time, Democrats broadly came to be seen as the party more comfortable with an active federal government and Republicans as the party seeking a more restrained Washington.

But the Trump era has scrambled those identities.

Trump has shown less respect for traditional conservative ideology, such as limited government and a general deference to the authority of states. Instead, he has taken a maximalist approach to executive power.

His actions have placed Democratic state officials in a position of advancing limits on the federal government, whether through lawsuits or legislation. And they have put Republican supporters of the president at odds with decades of conservative rhetoric.

“I do think that progressives are seeing that federalism — there’s a reason it’s in our constitutional order and it isn’t just something that’s left for conservatives,” said Sean Beienburg, an associate professor at Arizona State University who researches federalism and constitutional law.

In Los Angeles, Chicago and Portland, Oregon, Trump deployed federalized National Guard troops onto city streets before courts held him back and he withdrew. For a time, active-duty Marines also patrolled Los Angeles, an extraordinary use of the military for domestic purposes.

Oregon Democratic Attorney General Dan Rayfield, who challenged the deployment of the National Guard in his state, said the fight underscores why lawsuits matter in checking Trump’s power.

“People should be shocked that Oregon has filed 55 lawsuits,” Rayfield said in an interview earlier this year. “Their mind should be blown. But their mind should be equally blown at how often we’re winning these cases.”

The Trump administration has won seven court decisions — and lost 58 — so far, according to a New York Times litigation tracker.

Democratic state lawmakers have also searched for ways to restrict federal immigration agents. In California, Democratic Assemblymember Alex Lee has proposed prohibiting state tax breaks for Immigration and Customs Enforcement contractors — a move that could carry national implications because of the size of the state’s economy.

“We also, now, are reasserting what the role of the states and the federal government are,” Lee said.

But among Republicans, Trump has successfully maintained his grip. Many conservative state leaders have supported the president’s most controversial moves, even those criticized as federal overreach.

During President Joe Biden’s term, Texas Republican Gov. Greg Abbott was a staunch proponent of state autonomy and repeatedly challenged the federal government on regulatory issues and its deployment of a state’s National Guard. But Abbott has supported Trump’s expansion of federal powers, going so far as to authorize the deployment of the Texas National Guard to aid immigration enforcement in Illinois and Oregon.

Republican U.S. Sen. Jim Justice, the previous governor of West Virginia, said federalism remains “alive and well” under Trump. He said he was worried about the nation’s trajectory before coming to Washington in 2025.

“We’ve had to change things,” he said. “There’s new things that are going on that no question they’re disrupting folks on the other side of the aisle.”

Still, other Republicans have pushed back on the administration’s escalating hostility toward liberal states.

Oklahoma Gov. Kevin Stitt sharply criticized the deployment of the National Guard, saying “Oklahomans would lose their mind” if a Democratic-controlled state sent troops to his state during Biden’s presidency. He has warned that the expanding power and spending of the federal government is dangerous no matter which party controls Washington.

“When we have this powerful of a federal government, it should be frightening for everyone,” Stitt said during a February event at The Pew Charitable Trusts in Washington, D.C.

‘States created the Constitution’

As the reach of the federal government ballooned over generations, Democratic and Republican presidents have used federal funding to wield more influence over state and local governments.

Federal dollars account for an increasingly large percentage of state revenues, rising from 22% in 1989 to 36% in 2023, according to Pew, which analyzed census and federal economic data. States received more than $1 trillion in federal grants that year.

Over the years, that largesse has encouraged states to pursue policy agendas favored by the current party in power at the federal level.

But Trump has weaponized federal funds in unprecedented ways, experts say. Bypassing Congress and despite numerous court losses, the White House has held up funding for higher education, transit, housing and infrastructure — particularly for states that displease him.

The administration’s attempts to terminate funding for the $16 billion Gateway rail tunnel connecting New York and New Jersey remain entangled in a lawsuit. New Jersey Democratic Gov. Mikie Sherrill said the White House has caused millions in cost overruns and delays, in what she characterized as the most urgent and consequential infrastructure project in the country.

In February, Politico reported Trump told congressional leaders he would release funding for the project in exchange for renaming Washington Dulles International Airport in Virginia and Penn Station in New York City in his honor.

Parshall, of Daemen University, noted that more state leaders of both parties are pushing to reassert state-federal boundaries — whether in the areas of agriculture or the future of artificial intelligence.

“Federalism scholars are seeing this as a potentially pivotal moment in federal-state relationships,” she said.

Last August, elected leaders gathered at the National Conference of State Legislatures in Boston, where in 1773 colonists hurled chests of tea into the Boston Harbor in protest of Great Britain’s King George III. At the conference, lawmakers grumbled about a federal government increasingly sidelining states. That organization, representing more than 7,000 state and territory legislators, has consistently urged the Trump administration to respect states’ inherent authority.

In December, a bipartisan group of more than 40 lawmakers from 30 states gathered to discuss federalism issues, unanimously approving a declaration on the importance of states’ ability to legislate independently. That document noted that the Constitution did not create the states, “but rather the states created the Constitution, ratifying a framework in which we would both govern collectively and independently.”

New Hampshire state House Speaker Sherman Packard, a Republican, said state-federal tensions have been mounting for decades. He noted that the major tax and spending law the president signed last summer — often called the One Big Beautiful Bill Act — both cut federal funding to states and saddled them with new costs and administrative work. But it’s just the latest example of what he views as a federal government overstepping its bounds.

“And it’s getting more and more prolific that they’re taking on and doing things that most of us feel is inappropriate,” Packard said. “If we don’t fix this, we’re going to lose state sovereignty altogether. And that’s just not the way it was set up.”

Reporter David Lightman contributed to this story. Stateline reporters Jonathan Shorman and Kevin Hardy can be reached at jshorman@stateline.org and khardy@stateline.org.

State rainy day funds — money reserved to cover unexpected expenses and patch short-term budget holes — are declining nationally as states face increased costs, lower tax revenue and federal budget cuts, a new analysis found. 

The decline follows a period of strong reserves bolstered by federal pandemic aid and higher-than-expected tax collections, the report said.

Researchers at The Pew Charitable Trusts found that the number of days that state reserves could cover state operations fell in fiscal year 2025 — the first decline since the Great Recession. 

State reserve funds will play a critical role in stabilizing state finances as they confront the most widespread budgetary pressures since at least 2020, the researchers said. Like household savings accounts, state reserves help fund major one-time investments or provide a cushion in times of disrupted tax revenues, including economic downturns. Lower reserves means states could be quicker to cut state services or raise taxes in times of tight budgets.

Examining data from a survey conducted by the National Association of State Budget Officers, Pew researchers concluded that the median state in 2025 could fund its operations on reserve funds for 47.8 days — down from a record 54.5 days in fiscal 2024. 

States last fiscal year held a collective $174 billion in savings, though reserves varied widely. Wyoming, for example, held enough cash on hand to operate for 320 days. But New Jersey’s reserve didn’t hold enough to cover a single day of state operations. The other states with the smallest share of rainy day reserves were Washington, Illinois, Delaware and Rhode Island. 

The Pew analysis found that 26 states in 2025 had less capacity in their rainy day funds — meaning they would cover fewer days of state operations. In 14 of those states, officials drew on reserves, while 10 grew their balances but did so more slowly than they increased state spending. Two states maintained flat reserve levels as expenses grew.

While helpful in the short term, reserves won’t provide a long-term solution for states as many are confronting structural imbalances, meaning revenue streams are not keeping up with government spending. 

“Although reserves exist to provide relief during times of fiscal stress, they are not a sustainable solution for persistent budget shortfalls,” the analysis said. 

Budget pressures are expected to increase as states grapple with major federal policy changes that cut state funding and increase state administrative costs for federal safety net programs including Medicaid and food assistance. 

In its most recent survey of state budgets, the National Association of State Budget Officers found that general fund spending was projected to be “nearly flat” in fiscal year 2026 budgets. More states last year began enacting spending cuts and hiring freezes to balance budgets, the survey found, and slow revenue growth was projected for a fourth consecutive year. 

The survey showed 23 states expected spending to stay flat or decline in 2026, while 14 expected spending to grow by less than 5%. Seven states projected growth between 5% and 10%, while five expected spending to grow by more than 10%. 

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.

The earnings gap between men and women slightly widened last year, according to a new analysis published Thursday. 

The left-leaning Economic Policy Institute calculated women last year earned 18.6% less than men per hour on average. That’s up slightly from 2024, when the wage gap narrowed slightly to 18%. 

The wage analysis, which examines several federal data sets and independent research papers, controls for race, ethnicity, education, age, marital status and geography.

The findings were published ahead of Equal Pay Day on March 26, a symbolic date marking how far into 2026 women would have to work on top of their 2025 hours to match what men earned in 2025.

The new analysis found the wage gap is smallest among lower-wage workers, in part because minimum wages create a uniform wage floor. But women are paid less than men across all education levels — women with a graduate degree on average earn less than men with only a college degree, it said.

The analysis found the widest wage gap among Black and Hispanic women: Black women are paid only 68.3% of white men’s median wages. That’s a gap of $9.87 per hour — translating to roughly $20,500 lower annual earnings for a full-time worker. 

The institute says women earn less because of occupational differences, societal norms and the devaluation of women’s work. 

The organization suggests states enact pay transparency laws, mandate employers provide paid family and medical leave, raise the minimum wage, fund universal child care and remove laws that make it harder to join labor unions. But conservative lawmakers and private employers argue that many of those policies would lead to reduced workforces or higher prices.

“Closing pay gaps by gender and by race and ethnicity will require policy solutions on multiple fronts,” the report said. “Although attacks on gender and racial equity continue at the federal level, state lawmakers can and must take steps to address the gender wage gap.”

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.

Investor-owned utility profits have soared as consumer utility bills have skyrocketed in recent years, according to a new analysis of dozens of electricity providers.

The Energy and Policy Institute, a watchdog group tracking fossil fuel and utility industries, analyzed financial disclosures from 110 investor-owned electric utilities between 2021 and 2024, as well as available 2025 filings. The report, published on Thursday, does not include nonprofit electric providers such as municipal utilities or rural electric cooperatives. 

Last year, state-regulated, investor-owned electric utilities kept about 15 cents of every dollar they collected as profit, the report concluded. (For a customer paying a $200 monthly electric bill, that means about $30 went to corporate profits.) The 2025 figure is up from around 13 cents on average between 2021 and 2024, it said.

The utilities examined in the analysis reported almost $186 billion in profits between 2021 and 2024, the study concluded.

“These patterns suggest that a substantial share of what customers pay for electricity is consistently flowing to investors as profit,” the report said, “a finding that is especially significant as consumers face persistently high energy costs and financial stress.” 

The analysis found regional variation in utility profits. 

Utilities in the Southeast operating outside of organized wholesale electricity markets, where electricity is sold and bought in bulk, earned higher profits. Across Alabama, Florida, Georgia and other Southeastern states, utilities retained nearly 16% of their revenue as profit between 2021 and 2024, the report said.

By contrast, utilities in the PJM Interconnection regional market serving the mid-Atlantic averaged about 11.8%, while utilities in New York and New England reported similar or lower levels. 

The report found the utilities with the highest average margin between 2021 and 2024 were MidAmerican Energy (27.22%), Florida Power & Light (23.51%), Nantucket Electric (23.24%), Empire District Electric (22.45%) and Florida Public Utilities (20.35%). 

The analysis comes as consumer utility bills continue to outpace the rate of inflation and state lawmakers of both parties increasingly scrutinize utility prices.

A February report from the National Energy Assistance Directors Association found about 1 in 6 U.S. households were behind on utility bills. That organization, which represents state employees administering federal energy assistance programs, said American households were collectively behind $25 billion on electric and gas bills at the end of 2025 — up from about $23 billion the year before.

The association said home heating costs were projected to rise by 11% this winter — more than four times the rate of inflation — reaching their highest level in at least four years amid higher electricity and natural gas prices and colder-than-average weather.

Most consumers get their electricity from utilities that must seek state approval for rate changes, with appointed or elected state boards approving price structures.

While state lawmakers, governors and regulators are increasingly questioning utility prices, the Energy and Policy Institute says states can take more action to control profits.

Thursday’s report calls for states to set lower profit rates for investor-owned utilities, scrutinize the financing of new capital investments, link utility earnings to customer results and strengthen the role of consumer advocates in rate decisions.

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.

Nearly one-third of the nation’s private sector workers are covered by paid leave programs as more states require employers to provide medical and family leave, according to a new analysis released this week.

Currently, the District of Columbia and 13 states have passed laws requiring paid leave for many workers, according to a report from the National Partnership for Women & Families, a nonprofit that advocates for reproductive rights, health and economic justice, and workplace equality.

“States have shifted the paradigm now that more than 46 million workers across the U.S. are covered by paid family and medical leave programs, pointing the way forward for the rest of the country,” Jessica Mason, senior policy analyst at the organization, said in a news release. 

The programs vary in design, but generally guarantee paychecks while workers take time off for illness or to care for a child or other loved one. They’re funded through employer and employee premiums similar to unemployment insurance or payroll taxes that cover a portion of employee wages when they take leave.

The report cites research showing multistate employers often respond to local paid sick leave laws by providing paid sick leave to their workers even in places without such requirements.

This year, Delaware, Maine and Minnesota began or planned to start offering benefits through new paid leave programs. And the report cites growing momentum in six more states: Hawaii, Illinois, Nevada, New Mexico, Pennsylvania and Virginia. If those states were to implement paid leave policies, 44% of workers nationwide would have access to paid family and medical leave, according to the analysis. 

In Virginia, lawmakers in both chambers have approved bills guaranteeing up to 12 weeks of paid family leave. While previous efforts were vetoed by former Republican Gov. Glenn Youngkin, current Democratic Gov. Abigail Spanberger is expected to sign a bill once a final version makes it to her desk, the Virginia Mercury reported. 

In a January address to the legislature, Spanberger said that “being pro-business and being pro-worker are not mutually exclusive.”

“We can support business growth and invest in our workforce. We can attract new companies and protect workers. … That is why we will create a statewide paid family and medical leave program.” 

Virginia is projected to spend about $116.51 million in startup costs over the 2027 and 2028 fiscal years. By 2031, the program is expected to spend $2.1 billion per year in benefits — funded by payroll tax collections. 

Opponents frequently cite the costs of paid leave programs and the burdens they place on businesses. Last month, Virginia Republican state Del. Michael Webert said large corporations may be able to afford new costs and administrative burdens, but not smaller employers. 

“The impact will not fall evenly,” he said ahead of the House vote last month.

Across much of the Midwest and South, state laws prohibit local governments from requiring employers to provide paid sick leave. In 18 states, cities are effectively stripped of the power to enact their own labor protections.

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.

Online prediction markets allow users to put money on the outcome of almost anything — this weekend’s NBA game between the Warriors and the Thunder, the next supreme leader of Iran, whether the government will confirm the existence of aliens.

But those markets have no state oversight and operate even in states that ban gambling.

The platforms are raising bipartisan alarms, especially related to sports gambling. As states have legalized sports betting in recent years, they’ve required legal sportsbooks to jump through multiple hoops — from age verification procedures to protections for gambling addiction to tax collections. Online prediction markets circumvent all those rules.

Platforms including Kalshi and Polymarket say they are offering contracts similar to commodity markets that speculate on the future price of corn or oil — not outright gambling. But a growing number of states are rejecting those justifications, arguing the platforms are offering a backdoor to skirt state gambling regulations, particularly on sports.

The issue has sparked action from state regulators, new legislation, and lawsuits from both states and prediction markets. Complicating matters are the federal government’s moves to block state regulation of prediction markets, which see more than $13 billion in transactions each month.

Most activity on those platforms revolves around sports. And in national ads, Kalshi even marketed itself as the first national legal sports betting platform — even though states approve and regulate sports gambling since a 2018 Supreme Court decision. In 11 states, sports gambling remains illegal.

“This is sports wagering. If it looks like a duck and quacks like a duck, it’s probably sports wagering, in this situation,” said Kentucky state Rep. Michael Meredith, a Republican.

Meredith, who sponsored a 2023 law that legalized sports betting in Kentucky, called for states to regulate prediction markets during a webinar hosted by the National Conference of State Legislatures. That organization, representing state legislators across the country, has urged Congress “to act swiftly to address the rapid growth of unregulated sports‑related event contracts.”

State leaders argue their longstanding authority to oversee gambling should allow states to regulate or ban prediction market platforms. But those companies maintain they are not beholden to state regulations.

“I think it’s very clear that this authority should be vested in our state governments,” Meredith said last month.

In New York, lawmakers are considering legislation that would ban prediction markets from offering contracts on sports events, in addition to natural disasters, acts of terrorism and deaths. In Nevada, where gambling and tourism are top economic drivers, regulators are involved in a protracted legal fight after the state sought to stop prediction market activity on sports.

“To me, this is clearly gambling,” Thomas Reeg, CEO of Caesars Entertainment, which operates casinos and sports betting, said during a company earnings call in January.

But states are also fighting an obscure federal agency seeking to protect the emerging marketplace. The Commodity Futures Trading Commission, which regulates derivatives such as futures contracts on stocks, has asserted it has “exclusive jurisdiction” over prediction markets and promised to fight state regulatory efforts in court.

The CTFC did not respond to Stateline’s request for comment. Neither did Kalshi or Polymarket, two of the leading prediction market companies.

A new wave of betting

Unless Congress passes legislation, experts say the courts will ultimately decide what role states can play in regulating prediction markets.

The standoff has led to litigation between the platforms and states in at least eight states, and officials in 11 states have sent cease and desist orders to prediction market companies, according to the American Gaming Association, an industry group representing casinos and sports books. A bipartisan group of attorneys general from 39 states and the District of Columbia recently urged a federal court to uphold state authority to regulate sports gambling.

The American Gaming Association says prediction markets should either get out of the sports betting business or follow the same regulations and rules that apply to sportsbooks such as DraftKings and FanDuel.

“They don’t want to pay the taxes, they don’t want to undergo the compliance and provide all of the consumer protections that are required by states of operators who operate legal sports betting,” said Tres York, the vice president of government relations for the association.

The organization estimates states have lost out on more than $570 million in sports gambling tax revenues since prediction markets began offering sports events contracts.

Many state leaders and experts are already concerned about the societal effects from the meteoric rise of sports gambling, which has transformed collegiate and professional sports, and the potential for manipulation by players.

“If you already have what I would call an epidemic of sports betting addiction in this country when you have regulated sports betting, imagine what it’s going to be like when you have essentially unregulated sports betting,” said Benjamin Schiffrin, director of securities policy at Better Markets, a nonprofit watchdog group advocating for consumer and investor financial protections.

The wide range of available bets also is raising alarms over election integrity and insider trading. In addition to individual elections, prediction markets have allowed wagers on the ouster of Venezuelan President Nicolás Maduro and the timing of the U.S. strike on Iran. Last week, hundreds of thousands of dollars were bet the day before the Iranian strikes, and more than 100 accounts cashed in $10,000 or more from successful predictions, according to a New York Times analysis.

“It’s a huge change to all of a sudden allow betting on elections, and it really threatens the underpinnings of our democracy,” Schiffrin said. “It just seems like there’s tremendous potential for wrongdoing.”

On its website, Kalshi says it operates under a “strict regulatory framework” with a suite of market integrity, surveillance, financial safeguards, and anti-manipulation protections.

Federal-state conflict 

Citing what it called “an onslaught” of state litigation, the Commodity Futures Trading Commission last month filed a court brief underscoring its authority to regulate prediction markets.

“To those who seek to challenge our authority in this space, let me be clear: We will see you in court,” Commissioner Mike Selig said in a video posted on social media. Selig is the only member of the presidentially appointed commission, which currently has four vacancies.

Utah Gov. Spencer Cox, a Republican, immediately vowed to oppose the federal agency and the prediction platforms in court. Gambling has been banned under the Utah Constitution since the state’s founding, and Cox posted on social media that prediction markets are “destroying the lives of families.”

Kalshi swiftly sued the governor and the state in federal court in anticipation of enforcement efforts and pending legislation in Salt Lake City. The company’s lawsuit cited the governor’s post and a column penned by Republican Attorney General Derek Brown explaining why he joined Connecticut Attorney General William Tong, a Democrat, “in urging Congress to address offshore gambling operations that disregard state law and target young Americans.”

Prediction market exchange Kalshi sues Utah over proposed prop betting ban

Utah Republican state Rep. Joseph Elison sponsored the legislation cited in Kalshi’s lawsuit. The bill, which has passed both chambers, would expand the state’s definition of gambling to include proposition betting — bets on the performance of an individual player or team that don’t necessarily affect the outcome of a competition. While Elison acknowledged the courts will ultimately determine the issue, he said prediction markets are essentially offering proposition betting without authorization.

”We’re 50 independent sovereigns that gave centralized government to the federal government to do certain things,” he told Stateline. “But the rest, we want those things to be under our purview. And this is one of those.”

The legal landscape 

In early rulings on the matter, courts have issued a mix of opinions: States have found initial success in state courts while results have been more mixed in federal courts, said Daniel Wallach, a gaming and sports gambling attorney tracking the issue.

But federal law has long affirmed state authority to oversee gambling, he said.

Despite attempts to cast transactions as investments, Wallach says courts will look at the substance of bets, which he said are almost indistinguishable from those made in state-regulated betting markets.

“The argument that this is investing rather than gambling is essentially elevating form over substance,” he said. “Plain and simple, this is wagering on the outcome of a sporting event.”

Wallach said state efforts such as cease and desist orders are counterproductive, as they essentially invite federal lawsuits from prediction market firms. He said states are better off pursuing gambling enforcement efforts in state courts, where several have won preliminary injunctions halting operations of the platforms temporarily.

For now, he said the federal agency has applied almost no scrutiny of the platforms, noting that the president’s family has a financial interest in the industry.

Donald Trump Jr., the president’s eldest son, has a business interest in two of the largest online prediction markets, and the president’s social media platform Truth Social announced it would start its own prediction market, according to The New York Times.

Journalist Dustin Gouker, who authors newsletters on gambling and prediction markets, noted that the CFTC rules that currently regulate prediction markets were built for financial products — not gambling. He said prediction markets have moved into the gaming market because “nobody said no.”

“It’s a bit of a mess,” he said. “If we’re going to have betting in 50 states for everyone 18 and over, shouldn’t we have thought about that a little bit more?”

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org. 

Outrage erupted last month when Oklahoma City residents learned of plans to convert a vacant warehouse into an immigration processing facility.

Making matters worse was the secrecy of the federal government: City leaders received no communication from U.S. Immigration and Customs Enforcement aside from a mandated disclosure related to historic preservation.

Planning a major development without city input is antithetical to the in-depth, sometimes arcane permitting, planning and zoning process in Oklahoma City. Mayor David Holt, a former Republican state senator, said those land use decisions are among the most crucial of any municipal government.

“For any entity to be able to open a detention center in our communities, potentially next to neighborhoods or schools, regardless of your views on immigration policy or enforcement, is very challenging, because that’s a very high-impact use, and that’s the kind of thing that we would expect to talk about,” he told Stateline.

Communities across the country are facing similar prospects as ICE undertakes a massive expansion fueled in large part by the record $45 billion approved for increased immigration detention by Congress last summer.

During President Donald Trump’s second term, ICE is holding a record number of detainees — more than 70,000 as of January — across its own facilities as well as in contracted local jails and private prisons. ICE documents from last week show plans for acquiring and renovating 16 processing sites that hold up to 1,500 people each and eight detention centers that hold up to 10,000 each, for a total capacity of 92,600 beds. The agency also has plans for some 150 new leases and office expansions across the country, Wired reported.

But ICE’s plans to convert industrial buildings — often warehouses — into new detention facilities have recently faced fierce opposition over humanitarian and economic concerns. From Utah to Texas to Georgia, local governments have sought to block these massive facilities. But with limited legal authority, city and state officials have turned to the court of public opinion to deter private developers and the federal government.

Holt, who is the president of the U.S. Conference of Mayors, a nonpartisan organization representing the more than 1,400 leaders of cities with populations of 30,000 or more, said cities have little legal recourse over the ICE facilities.

“We all have a clear, unified position that really crosses party lines,” he said, “and then we also have a clear understanding of how limited our options are.”

Local leaders often cite the U.S. Constitution’s supremacy clause, which says federal laws supersede conflicting state laws. That leaves cities with limited influence over projects that could take industrial space off tax rolls, cause new strains on city services and raise serious humanitarian concerns given the Trump administration’s aggressive immigration enforcement, including the high-profile killings of two Americans in Minnesota.

Facing bipartisan opposition, the out-of-state owner of the Oklahoma City warehouse ultimately decided to end talks of selling or leasing its warehouse to the federal government.

Similar public pressure has proved effective in reversing plans in several other cities: In late January, a Canadian firm said it would not proceed with a planned sale of a Virginia warehouse after it faced calls for a boycott from Canadian politicians and businesses. In Mississippi, U.S. Sen. Roger Wicker announced the federal government would “look elsewhere” after he spoke with Department of Homeland Security Secretary Kristi Noem, who oversees ICE. Wicker, a Republican who said he supports immigration enforcement, echoed local economic concerns of a project planned in Byhalia.

Some officials have welcomed the new facilities: Missouri Republican U.S. Rep. Mark Alford has lobbied to land a detention and processing center in his district. And last week, a Maryland county approved a resolution expressing its “full support” for ICE, which is considering purchasing a warehouse there, despite local protests. But most communities have fought them.

Proposed Oklahoma City ICE facility is off the table

Neither DHS nor ICE responded to Stateline’s questions.

Holt said the discussion resembles other local development concerns where NIMBY — short for Not in My Backyard — is a common description of opponents.

“There are plenty of people who are very law-and-order and supporters of law enforcement who don’t want a jail next to their house,” he said. “That’s why it’s got such broad opposition: NIMBYism is the most powerful force sometimes in American politics and nobody wants a detention center next to their home, their business or their school.”

A political and legal fight

After learning that ICE planned to take over a vacant warehouse within its city limits, the Kansas City Council in January swiftly approved a five-year ban on nonmunicipal detention facilities.

Kansas City Council member Andrea Bough, who is also a private development attorney, said the move was both political and legal: The city wanted to send a clear signal opposing ICE facilities, but it also wants to exert its local authority over planning and zoning.

She acknowledged the legal hurdle posed by the supremacy clause, but said there was enough ambiguity over the city’s ability to regulate land use that it may take the issue to the courts.

“Some would say local building codes and zoning regulations do not apply to the federal government,” she said. “That’s something I think we would probably in this situation be willing to fight until we had clear guidance on that.”

Following weeks of pressure, the Kansas City firm that owns the 920,000-square-foot warehouse announced Thursday it was no longer “actively engaged with the U.S. Government or any other prospective purchaser,” the Kansas City Star reported.

Jackson County, which includes portions of Kansas City and the potential detention facility, is considering a similar ban. And across the state line, the Unified Government of Wyandotte County and Kansas City, Kansas, is considering a similar two-year moratorium.

But there are clear limitations on cities’ ability to stop federal projects, said Nestor Davidson, a professor who teaches land use and local government law at Harvard University’s Graduate School of Design.

“The federal government can assert immunity from certain state and local laws, including zoning, but it’s complicated, and there are nuances,” he said.

Still, Davidson said some case law has shown cities may have stronger legal footing for zoning rules that are broad and not directly targeted at specific federal government projects.

“I expect to see litigation,” he said. “I think you’re going to see these conversations play out as land use fights often do: both in a legal venue and in a political venue.”

Governments pressured to act

Kansas City’s moratorium has sparked interest among local activists who have pressured elected officials in other cities across the country to act. But many local officials are adamant that federal law ties their hands.

U.S. Reps. Maxwell Frost & Darren Soto tell Kristi Noem not to open ICE facility in Central Florida

In a legal opinion provided to the Orlando City Council in Florida, City Attorney Mayanne Downs rejected “suggestions of actions we can supposedly take,” including moratoriums or using zoning ordinances to block ICE detention centers.

“However well motivated these suggestions are, the law is very clear: ICE, as an agency of our federal government, ICE is immune from any local regulation that interferes in any way with its federal mandate,” Downs wrote to the mayor and city commissioners.

ICE is reportedly considering a new $100 million processing center in southeast Orlando.

The county commission in Orange County, which includes Orlando, discussed the issue last week after receiving similar legal advice. County Commissioner Nicole Wilson said the board is even more constrained because of a recent Florida law limiting certain local governments’ ability to regulate development through 2027.

After being advised against passing a moratorium, the board agreed with Wilson’s follow-up suggestion to draft a resolution expressing its opposition. That will be considered at a future meeting.

“It doesn’t sound like it has the teeth that a moratorium would have, but it essentially gives an awareness that we’ve established a position in opposition to this type of facility in Orange County,” Wilson told Stateline.

An attorney by trade, Wilson said the case law regarding federal projects largely centers on disputes about post offices, which she said is not an appropriate comparison to the massive detention centers currently contemplated.

“A post office has the same water consumption and sewage as probably a lot of other uses,” she said. “If you take a warehouse that was designed for 25,000 widgets and put 15,000 humans in it, you’ve got a very different set of local needs and services that are being used and being taxed and being burdened.”

Working with the feds

Communities have often opposed various other federal projects, such as federal courthouses. But the federal government generally takes the time to listen to local concerns and communicate building plans with communities, said Jason Klumb, a former regional administrator with the U.S. General Services Administration, which manages the federal government’s real estate.

“Generally, GSA has had kind of a good neighbor approach, understanding that they have requirements for federal facilities, and some of those facilities may not always be popular,” said Klumb, an Obama appointee.

But the federal government has not been shy about exerting its constitutional authority.

For example, late last month, GSA announced it would build a new $239 million federal courthouse in downtown Chattanooga, Tennessee, despite bipartisan lobbying from city and federal officials for a different site.

“The feds get what the feds want, ultimately,” Klumb said.

In a statement, a GSA spokesperson declined to clarify the agency’s current role in acquiring ICE detention facilities. The statement said the agency was “following all lease procurement procedures in accordance with all applicable laws and regulations.”

Communities have largely been left out of the administration’s immigration decision-making process.

New documents confirm federal government plans to put an ICE facility in Merrimack

“Most of the information we have received on this facility has been through news leaks and the government has not reached out to us yet,” said Paul Micali, the town manager of Merrimack, New Hampshire.

Through an open records request, the ACLU of New Hampshire confirmed that ICE was planning to convert a 43-acre warehouse property in the town of about 28,200.

The federal plans were obtained from the state’s historic preservation office, which came under fire for not informing Republican Gov. Kelly Ayotte of ICE’s proposal. That agency’s top official resigned last week after pressure from Ayotte.

Ayotte’s office did not respond to a request for comment. On Thursday, her office released documents detailing how the federal government’s $158 million plan to retrofit the property would create hundreds of long-term jobs for the region.

Testifying before Congress Thursday, an ICE official said the feds will not cancel the project over local concerns.

Micali said the vacant warehouse currently provides about $529,000 in annual property taxes — a substantial sum given the town’s property tax base of about $20 million.

In a letter to Noem, the Town Council said converting the property to a tax-free federal facility would result in higher local taxes for residents. Merrimack is also concerned about potential demands for water, fire and other city services, Micali said, but can’t even begin to assess needs without more details from the feds.

He’s speaking with lawyers about what options, if any, the town may have to assert local zoning power.

“We’re looking at every possibility,” he said.

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org. 

An Amazon Web Services data center is shown situated near single-family homes in Stone Ridge, Va., in 2024. As Americans grow increasingly frustrated over their electricity bills, states are trying to keep the nation’s growing number of data centers from causing higher energy costs for consumers. (Photo by Nathan Howard/Getty Images)

As Americans grow increasingly frustrated over their electricity bills, states are trying to keep the nation’s growing number of data centers from causing higher energy costs for consumers.

For years, many states competed aggressively to land data centers, sprawling campuses full of the computer servers that store and transmit the data behind apps and websites. But many officials are now scrutinizing how those power-hungry projects might affect the electric bills of households, small businesses and other industries.

Oregon last year became one of the first states to enact a law requiring utilities to charge data centers different electric prices than other industries because of how they drive up the cost of energy production and transmission.

“We are now making data centers pay a higher rate commensurate with the amount of energy they’re sucking out of the system,” said Oregon state Rep. Tom Andersen, a Democrat.

Republican and Democratic leaders in at least a dozen states have targeted data centers with separate, higher electric rates to protect other customers. States also are requiring long-term commitments and financial guarantees through collateral before greenlighting infrastructure investments for new data center projects. But lawmakers acknowledge that numerous factors affect energy prices, so targeting data center-specific costs can be complicated.

An increasingly digital world and the rise of energy-intensive artificial intelligence has led to major expansion of data centers: Consultant McKinsey & Company expects companies to spend nearly $7 trillion worldwide on data centers by 2030. But the industry is facing growing scrutiny, from neighbors who don’t want to live near the massive server farms and from residents worried about how data centers will affect their own swelling utility bills.

Delaware legislation that would charge data centers higher rates advanced out of committee last week. On Tuesday, a Florida state Senate committee approved a bill that would create new rate structures for data centers.

In Oklahoma, a Republican state senator has proposed a moratorium on new data centers until late 2029, allowing the state to study how data centers affect utility rates, the environment and property values.

Separate legislation from state Rep. Brad Boles will seek to protect other ratepayers from the costs of data centers. Boles, the Republican chair of the state Energy and Natural Resources Oversight Committee, said his in-the-works measure would ensure data centers pay their fair share.

Boles told Stateline that his constituents are increasingly worried about data centers, with a dozen potential major ones proposed across the state.

“We’re trying to ensure that those data centers pay for their own infrastructure and we don’t shift that cost or burden to everyday Oklahomans,” he said.

In Oregon, Andersen’s legislation created a new rate structure for data centers with long-term contracts and required regulators to separate the costs of those facilities from other ratepayers.

But consumer advocates have already accused the state’s largest utility of trying to skirt the new law by making residential customers pay part of the long-term cost of supplying large data centers in a pending rate case.

Andersen, a member of the state House Committee on Climate, Energy and Environment, said the new rate structure is unlikely to immediately lower consumer bills. Rather, it aims to curb future increases as data centers require more power generation and transmission.

“We’re not going to change the rates that are being currently paid by the ratepayers and the users of the electricity,” he said. “It’s just going to stop future raises.”

The data center boom

Rising utility bills continue to outpace inflation, sparking anger from consumers and more scrutiny from state regulators, governors and lawmakers.

The boom of data centers is frequently cited as a prime reason for rising electricity prices, as their operation requires more power generation, transmission and distribution upgrades. A Bloomberg News analysis in September found wholesale electricity costs as much as 267% more for a single month than it did five years ago in areas with significant data center activity.

Data center companies say they aren’t the only reason prices are rising.

“It’s inaccurate to draw a clear line between large load customers like data centers coming online and increases in prices. It’s just not that simple,” said Lucas Fykes, senior director of energy policy and regulatory counsel at the Data Center Coalition, a trade group representing data center owners and users, including Amazon, Meta and Visa.

He said many factors have contributed to higher electricity prices, including extreme weather events and the nation’s aging electric grid.

Fykes said his organization opposes rate structures that treat data centers differently from other large electric users such as industrial sites. The organization is working with regulators as states increasingly implement practices to ensure residents and small businesses aren’t on the hook for big energy investments if major projects including data centers don’t come to fruition.

Fykes said the country is likely just in the “beginning innings” of a longer ramp-up in technology and power needs.

“We are also in a global race to build out data centers, to support AI, to support cloud infrastructure,” he said. “It’s important to make sure that we maintain those assets here in the United States.”

That can pose competing interests for political leaders, including mayors, who have pushed hard to land investments from tech companies.

“We want to be leaders in AI, but we don’t want the infrastructure needed to support it,” said Rusty Paul, the mayor of Sandy Springs, Georgia, in the Atlanta metro area.

He was among several mayors addressing the issue of data centers at last month’s winter meeting of the United States Conference of Mayors in Washington, D.C. On a data center panel, Paul acknowledged the effect of Georgia’s tax incentives for data centers: “They’re just popping up everywhere,” he said.

But utilities and regulators are also making long overdue grid upgrades that aren’t tied to data centers, he said.

“The cost of electricity is going up for everybody — and it’s not all related to data centers,” he said.

A bipartisan push

The Georgia Public Service Commission last year created new rules that officials said would protect ratepayers from data center costs. In addition to covering costs of power consumed at their facilities, data centers would have to fund the costs incurred by upstream generation, transmission and distribution, the regulator said.

But lawmakers aren’t convinced those steps went far enough.

State Sen. Chuck Hufstetler, a Republican, is again pushing legislation that would solidify the regulator’s rules into law. His bill would prohibit utilities from passing along the fuel, generation or transmission costs of data centers to other customers.

He told Stateline that the regulator’s rules need to be codified into law so they can’t be weakened later.

Hufstetler said rising utility bills are among the biggest issues facing his constituents. High prices played a key role in November’s election, when Democrats flipped two seats on the state’s Public Service Commission board — the first time Democrats won statewide constitutional office in nearly two decades.

“I saw people with MAGA hats going into the election polling places that were saying, ‘I’m not voting for those guys that raised my rates,’” Hufstetler said, referring to the Republican incumbents who lost.

Hufstetler said the bill, which passed out of committee last year, has already gained major bipartisan support in the Senate, where it is sponsored by multiple Republicans and Democrats.

“This is very bipartisan,” he said. “We have all heard from our people around the state of Georgia.”

The Georgia Public Service Commission agrees in principle with the legislation, said agency spokesperson Tom Krause. But he said the regulator worries about losing flexibility if its rules are written into law.

“Not just this bill, but whenever the legislature codifies a rule that we put in place, we get a little nervous because it can tie our hands in special circumstances,” he said.

A complex challenge

As part of implementing a law enacted last year, Maryland’s utility regulator is weighing a new rate structure for data centers and other large load users.

Proposed regulations would require certain preapproval analysis for heavy power users, a separate rate tariff for data centers and collateral to ensure other ratepayers don’t end up paying for major investments if projects do not come to fruition.

Maryland’s Office of People’s Counsel, an independent agency representing residential utility users, said the proposed changes meet statutory requirements but could do more to protect consumers.

In a news release last month, Maryland People’s Counsel David S. Lapp said residents are already facing higher costs from data centers from outside the state.

“While we push for better federal rules to address those costs, Maryland has the power—and customers a clear need—to make sure data centers within Maryland take on every cost that they impose on residential customers,” Lapp said.

Democratic Gov. Wes Moore recently joined 12 other governors and the Trump administration in urging the regional grid operator, PJM Interconnection, to shield residents and businesses from the infrastructure costs from data centers.

Maryland state Del. Lorig Charkoudian, a Democrat, said the grid operator has for years failed residents in the 13 states plus the District of Columbia that it serves. By delaying renewable energy projects, she said, PJM has kept older, more expensive power plants online, driving up prices as data centers increase demand.

PJM’s board last month rolled out a new data center plan that it said would improve demand forecasting, accelerate the addition of new generation projects and give states a larger role.

Charkoudian said states and utilities struggle to determine just how much power is needed. Data center users shop around for sites, which can cause wildly inaccurate forecasts of just how much power a utility will need.

“It actually has a very concrete financial impact on ratepayers,” she told Stateline. “And so that’s why one of the things that really could make a difference for ratepayers is if we actually had an accurate count of how much we’re getting online.”

While some of those challenges lie outside the realm of state control, Charkoudian said there are things the state can do, including the new rate structure for larger users. She’s crafting a bill encouraging data centers to curtail their power usage during peak periods, such as hot days, when the electrical system is taxed by heavy usage of air conditioners, Maryland Matters reported.

Charkoudian said adding solar generation and storage are low-cost ways to respond quickly to demand. And states can avoid the need for more generation by doubling down on energy efficiency programs that lower demand and also consumer costs.

“The best time to fix this was five years ago,” she said. “The next best time is right this minute, because it’s only going to get worse.”

Stateline reporter Robbie Sequeira contributed to this story. Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.