US Regulator Takes Wisconsin to Court in Ongoing Battle for Control of Prediction Markets

The US state of Wisconsin has become the latest to be sued by the Commodity Futures Trading Commission in an escalating dispute over the agency's authority to regulate prediction markets. This move comes as the CFTC asserts its jurisdiction over trading platforms such as Kalshi and Crypto.com. Several states, including New York, Arizona, Illinois, and Connecticut, have previously attempted to enforce their own gaming laws against these businesses, only to face resistance from the CFTC. Chairman Mike Selig has spearheaded the agency's pushback, arguing that it has exclusive jurisdiction over event contracts, which he views as a form of derivatives activity. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for allegedly operating unlicensed gambling operations within the state. In response, Selig filed a lawsuit in the US District Court for the Eastern District of Wisconsin, stating that the CFTC will take action against any state that interferes with federal law governing financial markets. This development follows a similar lawsuit filed by the CFTC against New York last week. According to Ryan VanGrack, Coinbase's vice president of legal and head of global litigation, the CFTC's actions demonstrate a clear commitment to protecting its regulatory authority and ending jurisdictional ambiguity. Meanwhile, Arizona's criminal case against Kalshi has been put on hold, with the court suggesting that federal law is likely to preempt state gambling laws.