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 exert control over prediction markets, intensifying its campaign to establish jurisdiction over these markets. Several states, including New York, have targeted 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 led a counter-effort, arguing that his agency has sole jurisdiction over event contracts, which he considers a new form of derivatives activity. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations, prompting the CFTC to respond with a lawsuit. Selig stated that the agency will take action against states that interfere with federal law in regulating financial markets. The CFTC's actions have been seen as a clear signal that it will not tolerate state encroachment on its authority, with Coinbase's vice president of legal calling it a 'definitive line in the sand.' The agency's lawsuits against states, including New York and Wisconsin, aim to halt state-level pushback against prediction markets and assert federal authority.