US Regulator Takes Wisconsin to Court Over Prediction Markets Dispute

The Commodity Futures Trading Commission has added Wisconsin to its list of defendants in a series of lawsuits aimed at establishing the agency's jurisdiction over prediction markets. This move comes as several states, including New York, Arizona, Illinois, and Connecticut, have attempted to crack down on firms such as Kalshi and Crypto.com for allegedly violating state gaming laws. CFTC Chairman Mike Selig has spearheaded the agency's pushback, arguing that it has exclusive authority over event contracts, which he views as a new form of derivatives activity. Wisconsin recently sued several companies, including Kalshi, Coinbase, and Crypto.com, for operating unlicensed gambling operations, prompting the CFTC to respond with a lawsuit of its own. Selig emphasized that the agency will take 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 agency will no longer tolerate jurisdictional ambiguity, with Coinbase's vice president of legal, Ryan VanGrack, stating that the era of uncertainty is over. The lawsuit against Wisconsin is the latest development in an ongoing saga, with Arizona also pursuing a criminal case against Kalshi, which has been paused by a court pending the outcome of the CFTC's lawsuit.