US Regulatory Body Takes Wisconsin to Court Over Prediction Market Dispute

The Commodity Futures Trading Commission has expanded its legal campaign to defend its jurisdiction over prediction markets, suing Wisconsin after the state took action against several firms, including Kalshi and Crypto.com, for allegedly operating unlicensed gaming operations. This move is part of a broader effort by the CFTC, led by Chairman Mike Selig, to assert its authority over event-contract trading, which it claims falls under its purview as a form of derivatives activity. The dispute arises as several states, including New York, Arizona, and Illinois, have sought to regulate or shut down these platforms under state gaming laws. However, the CFTC argues that it has exclusive jurisdiction over these markets, citing federal law. The lawsuit against Wisconsin is the latest in a series of legal actions, with the CFTC also suing New York over a similar issue. 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 asserting federal authority over these markets. The legal battles come as states like Arizona have pursued criminal cases against firms like Kalshi, only to have courts pause proceedings, suggesting that federal law may indeed preempt state regulations.