US Regulatory Body Takes Wisconsin to Court Over Prediction Market Oversight

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 control over prediction markets. This move comes as several states, including New York, have attempted to regulate or shut down companies like Kalshi and Crypto.com for allegedly 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 considers a form of derivatives activity. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations, prompting the CFTC to file a lawsuit in response. Selig stated that the agency will take legal action against any state that interferes with federal law in regulating financial markets. The CFTC's actions have been seen as a clear signal that the agency will not tolerate state-level interference in its regulatory authority. As Coinbase's vice president of legal noted, the era of jurisdictional ambiguity is over, and the CFTC has drawn a line in the sand. The agency's lawsuits, including those in New York and Wisconsin, demonstrate its commitment to defending its authority over prediction markets.