US Regulator Takes Wisconsin to Court Over Prediction Markets

The US Commodity Futures Trading Commission has added Wisconsin to its list of states being sued for attempting to exert control over prediction markets, which the agency claims falls under its jurisdiction. Several states, including New York, Arizona, Illinois, and Connecticut, have targeted 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 spearheaded a legal counterattack, arguing that the agency has exclusive authority over event contracts, an emerging form of derivatives trading. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations within the state, prompting the CFTC to file a lawsuit in response. Chairman Selig stated that the agency aims to send a clear message: any interference with federal law regulating financial markets will be met with litigation. This development follows a similar lawsuit filed against New York last week, as well as a paused criminal case in Arizona, where a judge suggested that federal law may preempt state gambling laws.