US Commodity Futures Trading Commission Takes Wisconsin to Court Over Prediction Market Dispute

The US state of Wisconsin has become the latest jurisdiction to be sued by the Commodity Futures Trading Commission, as the agency continues to defend its authority over prediction markets. This move comes after several states, including New York, have targeted firms such as Kalshi and Crypto.com for allegedly violating state gaming laws. CFTC Chairman Mike Selig has been leading the charge, arguing that the agency has exclusive jurisdiction over the trading of event contracts, which he believes are a form of derivatives activity that falls under the CFTC's purview. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations, prompting the CFTC to respond with a lawsuit of its own. Chairman 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 significant development in the ongoing dispute over jurisdiction, with some industry leaders welcoming the clarity provided by the agency's lawsuits. The issue has also played 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.