US Regulator CFTC Takes Wisconsin to Court Over Prediction Market Control

The US Commodity Futures Trading Commission has added Wisconsin to its list of states being sued for attempting to regulate event-contract markets, following similar actions against New York. Several states have taken legal action against companies like Kalshi and Crypto.com, alleging they are violating state gaming laws through their betting operations. However, CFTC Chairman Mike Selig has led a pushback, arguing that his agency has sole jurisdiction over these markets, which he believes are a form of derivatives trading. 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 any state that interferes with federal law in regulating financial markets. The CFTC's actions have been seen as a clear signal that the agency will assert its authority over these markets, with Coinbase's vice president of legal stating that the era of jurisdictional ambiguity is over. Arizona has also been pursuing a case against Kalshi, but a court has paused the prosecution, suggesting that federal law may preempt state gambling laws.