US Regulatory Body Takes Wisconsin to Court Over Trading Dispute

The US Commodity Futures Trading Commission has added Wisconsin to its list of defendants in a series of lawsuits aimed at asserting the agency's authority over prediction markets. The move comes as Wisconsin joins a growing list of states, including New York, Arizona, Illinois, and Connecticut, that have been targeted by the commission for allegedly overstepping their jurisdiction. At the heart of the dispute is the question of whether event contracts traded on platforms like Kalshi and Crypto.com fall under state gaming laws or federal derivatives regulations. CFTC Chairman Mike Selig has taken a strong stance, arguing that his agency has exclusive jurisdiction over these emerging forms of derivatives activity. The latest development saw Wisconsin sue several companies, including Kalshi, Coinbase, and Crypto.com, for operating unlicensed gambling operations within the state. In response, Chairman Selig filed a lawsuit in the US District Court for the Eastern District of Wisconsin, emphasizing that the agency will take legal action against any state that interferes with federal law in regulating financial markets. This move is part of a broader effort by the CFTC to establish its authority over prediction markets, following similar lawsuits against other states, including a recent action against New York. The regulatory body's stance has been supported by a court decision in Arizona, where a judge paused a criminal case against Kalshi, suggesting that federal law is likely to preempt state gambling laws.