The Commodity Futures Trading Commission (CFTC) has initiated legal action against Wisconsin, adding the state to a list of others it is suing as part of its effort to assert control over prediction markets. Firms like Kalshi and Crypto.com are at the center of this jurisdictional dispute.
Several states, including New York, Arizona, Illinois, and Connecticut, have targeted these businesses for allegedly breaching state gaming laws through their betting platforms. However, CFTC Chairman Mike Selig has spearheaded a counteraction, asserting that his agency holds “exclusive jurisdiction” over event contracts, which he deems as derivatives akin to those traditionally regulated by the CFTC.
Last week, Wisconsin filed a lawsuit against Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com for operating unlicensed gambling activities within its borders. This action mirrors similar accusations directed at these companies in other states.
In response, Selig submitted filings in the U.S. District Court for the Eastern District of Wisconsin, stating his intent to protect federal oversight of financial markets by asserting: “If you interfere with the operation of federal law in regulating financial markets, we will sue you.”
Simultaneously, New York has pursued legal action against Coinbase and Gemini for their involvement in prediction markets, prompting a subsequent lawsuit from the CFTC targeting the state.
Meanwhile, Arizona continues its criminal proceedings against Kalshi, though an earlier decision by a judge temporarily halted these efforts, citing the potential for federal law to supersede state gambling regulations.