US Regulatory Agency 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 establishing the agency's jurisdiction over prediction markets. This move comes as several states, including New York, have attempted to crack down on companies such as 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 authority over event contracts, which he believes are a type of derivative. Wisconsin recently sued multiple 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 action against any state that interferes with federal law in regulating financial markets. The CFTC's actions have been seen as a clear assertion of its authority, with Coinbase's vice president of legal, Ryan VanGrack, stating that the agency has sent a strong signal by moving to block state encroachment. The issue is also playing out in other states, including Arizona, where a court has paused a criminal case against Kalshi, citing the likelihood that federal law will preempt state gambling laws.