US Regulatory Body Takes Wisconsin to Court Over Dispute on Prediction Markets

The US 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 legal action against companies such as Kalshi and Crypto.com, alleging violations of state gaming laws due to betting activities on their platforms. However, CFTC Chairman Mike Selig has been leading a legal counteroffensive, arguing that his agency has sole jurisdiction over event contracts, which he views as a form of derivatives trading that falls under the CFTC's purview. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations within the state. In response, Chairman Selig has filed a lawsuit in the US District Court for the Eastern District of Wisconsin, stating that the CFTC will take legal action against any state that interferes with federal law regulating financial markets. This development follows similar lawsuits against other states, including New York, where the CFTC responded to the state's lawsuit against Coinbase and Gemini with its own legal action. Arizona's criminal case against Kalshi has been put on hold, with the court suggesting that federal law may preempt state gambling laws, potentially bolstering the CFTC's position.