CFTC Takes Wisconsin to Court in Ongoing Battle for Control of Prediction Markets

The Commodity Futures Trading Commission has included Wisconsin in its list of states being sued for attempting to exert control over prediction markets, with the agency asserting its authority over the trading of event contracts. Several states, including New York, Arizona, Illinois, and Connecticut, have targeted companies such as Kalshi and Crypto.com, alleging violations of state gaming laws. However, CFTC Chairman Mike Selig has led a legal challenge against these states, arguing that the agency has exclusive jurisdiction over event contracts, which are a form of derivatives activity. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations, prompting the CFTC to respond with a lawsuit. Chairman Selig stated that the agency will take legal 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 era of jurisdictional ambiguity is over, with Coinbase's vice president of legal and head of global litigation, Ryan VanGrack, stating that the commission has sent an unmistakable signal by moving to block state encroachment.