US Regulatory Agency Takes Wisconsin to Court Over Prediction Market Dispute

The Commodity Futures Trading Commission has added Wisconsin to its list of states being sued for attempting to exert jurisdiction over prediction markets, a move that underscores the agency's determination to assert its authority in this area. Several states, including New York, have taken action against companies such as Kalshi and Crypto.com, accusing them of violating state gaming laws. However, CFTC Chairman Mike Selig has led a counterattack, arguing that the agency has exclusive jurisdiction over the trading of event contracts, which he considers a form of derivatives activity. The latest development comes after Wisconsin sued several companies, including Kalshi, Coinbase, and Crypto.com, for operating unlicensed gambling operations in the state. In response, Selig has filed a lawsuit in the U.S. District Court for the Eastern District of Wisconsin, stating that the agency will take action against any state that interferes with federal law in regulating financial markets. The CFTC's move has been seen as a significant escalation of the jurisdictional dispute, with Coinbase's vice president of legal, Ryan VanGrack, commenting that the agency has sent a clear signal that it will no longer tolerate state encroachment on its authority.