US Regulator Takes Wisconsin to Court Over Prediction Market Dispute

The US Commodity Futures Trading Commission has added Wisconsin to its list of states being sued for attempting to regulate prediction markets, which the agency claims fall under its jurisdiction. This move is part of a broader effort by the CFTC to defend its authority over these markets, which are offered by companies such as Kalshi and Crypto.com. Several states, including New York, Arizona, Illinois, and Connecticut, have previously taken action against these businesses, alleging violations of state gaming laws. However, CFTC Chairman Mike Selig has led a pushback against these states, arguing that the agency has exclusive jurisdiction over event contracts, which are a form of derivatives activity. Wisconsin recently sued several companies, including Kalshi, Coinbase, and Crypto.com, for operating unlicensed gambling operations in the state. In response, the CFTC has filed a lawsuit in the US District Court for the Eastern District of Wisconsin, with Chairman Selig stating that the agency will take action against states that interfere with federal law in regulating financial markets. This development is part of a larger dispute between the CFTC and several states over the regulation of prediction markets, with the agency seeking to assert its authority and prevent state-level interference.