US Regulatory Agency Takes Wisconsin to Court Over Prediction Market Oversight

The US Commodity Futures Trading Commission has added Wisconsin to its list of states being sued for attempting to exert control over prediction markets, which the agency claims fall under its jurisdiction. The move comes as several states, including New York, have taken action against companies such as Kalshi and Crypto.com for allegedly violating state gaming laws through their prediction market operations. CFTC Chairman Mike Selig has been leading the charge against these states, arguing that the agency has sole authority over event-contract trading, which he believes is a form of derivatives activity. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations, prompting the CFTC to file a lawsuit in response. The agency's actions have been seen as a clear message to states to refrain from interfering with federal law in regulating financial markets. The lawsuits have sparked a heated debate over jurisdiction, with some states pursuing criminal cases against companies, while others have paused prosecution due to the likelihood of federal law preemption. The CFTC's efforts have been seen as a significant development in the regulation of prediction markets, with one expert noting that the era of jurisdictional ambiguity is over.