US Regulator Takes Wisconsin to Court Over Prediction Markets Dispute

The US Commodity Futures Trading Commission has added Wisconsin to its growing list of states being sued over jurisdictional disputes related to prediction markets, with the regulator insisting on its exclusive authority to oversee these markets. Several states, including New York, have targeted firms like Kalshi and Crypto.com, accusing them of breaching state gaming laws, but the CFTC, led by Chairman Mike Selig, has pushed back, arguing that it has sole jurisdiction over event-contract trading, which it considers 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, with Chairman Selig stating that the agency will take action against states that interfere with federal financial market regulations. The CFTC's actions, including its lawsuits against New York and Wisconsin, demonstrate a clear stance on jurisdictional authority, according to Coinbase's vice president of legal, Ryan VanGrack, who believes that the era of ambiguity is over, with the commission sending a strong signal by blocking state encroachment. Arizona's criminal case against Kalshi has been paused, with the judge suggesting that federal law may preempt state gambling laws.