US Commodity Futures Trading Commission Takes Wisconsin to Court Over Prediction Market Authority

The Commodity Futures Trading Commission has added Wisconsin to its list of states being sued for attempting to exert jurisdiction over event-contract trading, following similar lawsuits against New York. Several states have taken action against firms like Kalshi and Crypto.com, alleging violations of state gaming laws due to betting activities on their platforms. However, CFTC Chairman Mike Selig has led a counter-effort, arguing that the agency has exclusive authority over the trading of event contracts, which are considered a new form of derivatives. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations, prompting the CFTC to respond with a lawsuit. Selig emphasized that the agency will take action against states that interfere with federal law in regulating financial markets. The CFTC has also sued New York over its attempts to regulate prediction markets, and a court in Arizona has paused a criminal case against Kalshi, citing the likelihood of federal law preempting state gambling laws.