CFTC Takes Wisconsin to Court in Ongoing Dispute Over Prediction Market Regulation

The Commodity Futures Trading Commission has added Wisconsin to its list of states being sued over the agency's jurisdiction on event-contract trading, following similar actions against New York. The CFTC's move is part of its efforts to assert its authority over prediction markets, which have come under fire from several states for allegedly violating gaming laws. CFTC Chairman Mike Selig has led the charge, arguing that the agency has exclusive jurisdiction over event contracts, which he believes are a form of derivatives trading that falls under the CFTC's purview. Wisconsin recently sued several firms, including Kalshi and Crypto.com, for operating unlicensed gambling operations in the state, prompting the CFTC to respond with a lawsuit. The agency's actions have been seen as a clear signal that it will not hesitate to take on states that interfere with federal law in regulating financial markets. The dispute has also drawn comments from industry players, with Coinbase's vice president of legal and head of global litigation stating that the CFTC's lawsuits mark a decisive turning point in the jurisdictional debate. Meanwhile, Arizona's pursuit of a criminal case against Kalshi has been put on hold, with a court ruling that federal law is likely to preempt state gambling laws.