US Regulator Takes Wisconsin to Court Over Prediction Markets Dispute

The US Commodity Futures Trading Commission has added Wisconsin to its list of defendants in a series of lawsuits aimed at establishing the agency's jurisdiction over prediction markets. This move comes as several states, including Wisconsin, have taken legal action against companies such as Kalshi and Crypto.com, alleging violations of state gaming laws. However, CFTC Chairman Mike Selig argues that his agency has exclusive jurisdiction over event contracts, which he believes are a form of derivatives. In response to Wisconsin's lawsuit against several companies for operating unlicensed gambling operations, Selig has filed a lawsuit in the US District Court for the Eastern District of Wisconsin, stating that the agency will take action against any state that interferes with federal law regulating financial markets. This development is part of a broader effort by the CFTC to assert its authority over prediction markets, with similar lawsuits filed against other states, including New York. According to Ryan VanGrack, Coinbase's vice president of legal, the CFTC's actions mark a significant shift, signaling the end of jurisdictional ambiguity and sending a clear message that the agency will defend its authority over financial markets.