US Regulatory Agency Takes Wisconsin to Court Over Prediction Market Oversight

The US Commodity Futures Trading Commission has added Wisconsin to its list of defendants in a series of lawsuits aimed at establishing the agency's jurisdiction over prediction markets. This move comes as several states, including Wisconsin, have taken action against companies like Kalshi and Crypto.com, alleging violations of state gaming laws. However, CFTC Chairman Rostin Behnam and previously Mike Selig have led a counter-effort, arguing that the agency has exclusive authority over the trading of event contracts, which are considered a type of derivative. The CFTC's stance is that these contracts fall under federal regulation, superseding state laws. Wisconsin recently filed a lawsuit against several companies, including Kalshi and Crypto.com, for operating unlicensed gambling platforms within the state. In response, the CFTC has filed a lawsuit in the US District Court for the Eastern District of Wisconsin, with Chairman Rostin Behnam emphasizing that the agency will take legal action against any state that interferes with federal regulations governing financial markets. Similar lawsuits have been filed against other states, including New York, as the CFTC continues to assert its authority in the realm of prediction markets.