US Regulator CFTC Takes Wisconsin to Court Over Prediction Market Oversight

The US Commodity Futures Trading Commission has added Wisconsin to its list of states being sued for attempting to exert control over prediction market trading, which the agency claims falls under its exclusive jurisdiction. This move is part of a broader effort by the CFTC, led by Chairman Mike Selig, to defend its regulatory authority against states that have accused firms like Kalshi and Crypto.com of violating local gaming laws. Selig argues that event contracts represent a new form of derivatives trading, which has traditionally been regulated by the CFTC. In response to Wisconsin's lawsuit against several companies, including Kalshi and Crypto.com, for allegedly operating unlicensed gambling operations, the CFTC has filed a lawsuit in the US District Court for the Eastern District of Wisconsin. The regulator aims to assert its dominance in overseeing financial markets and deter states from interfering with federal law. This development follows a similar lawsuit against New York and is seen as a significant move to clarify jurisdictional boundaries in the emerging prediction markets sector.