US Regulatory Body Takes Wisconsin to Court in Ongoing Dispute Over Predictive 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 legal action against companies such as Kalshi and Crypto.com, alleging violations of state gaming laws. However, CFTC Chairman Rostin Behnam's predecessor, Mike Selig, has led a counter-effort, arguing that the agency has sole authority over the trading of event contracts, which he views as a form of derivatives activity. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations 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 action against any state that interferes with federal law regulating financial markets. This development is part of a broader trend, with New York also facing a lawsuit from the CFTC over its attempts to regulate prediction markets, and Arizona's criminal case against Kalshi being put on hold due to the likelihood of federal law preemption.