CFTC Takes Wisconsin to Court in Ongoing Battle for Control of Prediction Markets

The 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. This move comes as several states, including Wisconsin, have taken action against companies such as Kalshi and Crypto.com, accusing them of violating state gaming laws. CFTC Chairman Mike Selig has been leading the charge, arguing that his agency has exclusive jurisdiction over event contracts, which he believes are a form of derivative activity. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations in the state. In response, Selig filed a lawsuit in the US District Court for the Eastern District of Wisconsin, stating that the agency will take action against any state that interferes with federal law regulating financial markets. This development is part of a larger trend, with the CFTC also suing New York over its attempts to regulate prediction markets, and Arizona pursuing a criminal case against Kalshi. A recent court ruling in Arizona has paused the prosecution, with the judge suggesting that federal law may preempt state gambling laws.