US Commodity Futures Trading Commission Expands Lawsuit Campaign to Wisconsin

The US state of Wisconsin has become the latest to be sued by the Commodity Futures Trading Commission in its ongoing effort to assert jurisdiction over prediction markets. This move comes as several states, including New York, have attempted to take action against companies such as Kalshi and Crypto.com for allegedly violating state gaming laws through their betting operations. CFTC Chairman Mike Selig has led the charge, arguing that the agency has exclusive authority 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, Coinbase, and Crypto.com, for operating unlicensed gambling operations within the state, prompting the CFTC to respond with a lawsuit of its own. The CFTC's actions are seen as a clear signal that it will not tolerate state interference in the regulation of financial markets. As stated by Ryan VanGrack, Coinbase's vice president of legal, the CFTC's lawsuits mark a definitive turning point, ending the era of jurisdictional ambiguity. The agency's move has also been influenced by a recent court decision in Arizona, where a judge halted the prosecution of Kalshi, citing the likelihood that federal law would preempt state gambling laws.