US Regulatory Agency Takes Wisconsin to Court Over Dispute on Prediction Markets Oversight

Wisconsin is the latest US state to face a lawsuit from the Commodity Futures Trading Commission, as the agency continues to assert its authority over prediction markets operated by companies like Kalshi and Crypto.com. The move comes after several states, including New York, Arizona, Illinois, and Connecticut, have attempted to regulate these businesses under state gaming laws, prompting a strong response from CFTC Chairman Mike Selig. He maintains that the agency has sole jurisdiction over event contracts, which he views as a new form of derivatives activity that falls under the CFTC's purview. Recently, Wisconsin filed a lawsuit against Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com, accusing them of operating unlicensed gambling operations within the state. In response, Chairman Selig filed a lawsuit in the US District Court for the Eastern District of Wisconsin, stating that his intention is to send a clear message: "Any interference with federal law regulating financial markets will be met with legal action." This development follows a similar lawsuit filed by New York against Coinbase and Gemini, to which the CFTC responded with its own lawsuit against the state. Meanwhile, Arizona's criminal case against Kalshi has been put on hold, with the court suggesting that federal law is likely to preempt state gambling laws.