US Regulator Takes Wisconsin to Court Over Prediction Market Dispute

The US Commodity Futures Trading Commission has filed a lawsuit against Wisconsin, marking the latest development in its campaign to assert jurisdiction over prediction markets. This move comes as several states, including Wisconsin, have taken legal action against companies such as Kalshi and Crypto.com, alleging violations of state gaming laws. However, CFTC Chairman Mike Selig argues that the agency has exclusive jurisdiction over event contracts, which are a form of derivatives. The regulator has pushed back against states like New York, Arizona, Illinois, and Connecticut, which have targeted businesses operating in the prediction markets space. Wisconsin recently sued several companies, including Kalshi and Crypto.com, for operating unlicensed gambling operations. In response, the CFTC has sued Wisconsin, with Chairman Selig stating that the agency will take action against any state that interferes with federal law regulating financial markets. This lawsuit is part of a broader effort by the CFTC to establish its authority over prediction markets, with similar lawsuits filed against other states. According to Ryan VanGrack, Coinbase's vice president of legal, the CFTC's actions mark a significant turning point, sending a clear signal that the era of jurisdictional ambiguity is over.