US Regulator Takes Wisconsin to Court Over Prediction Markets Dispute

The US Commodity Futures Trading Commission has added Wisconsin to its list of states being sued for attempting to regulate prediction markets, following similar lawsuits against New York, Arizona, Illinois, and Connecticut. The regulator, led by Chairman Mike Selig, claims it has exclusive jurisdiction over the trading of event contracts, which it considers a type of derivative. Several states have accused firms such as Kalshi and Crypto.com of violating state gaming laws, but the CFTC argues that federal law preempts state regulations. Wisconsin recently sued several firms, including Kalshi and Crypto.com, for operating unlicensed gambling operations, prompting the CFTC to respond with a lawsuit. According to Chairman Selig, the CFTC is sending a clear message: states that interfere with federal law in regulating financial markets will face legal action. The CFTC's lawsuits have been seen as a decisive move to establish its authority over prediction markets, with Coinbase's vice president of legal, Ryan VanGrack, stating that the era of jurisdictional ambiguity is over.