Wisconsin has joined a growing number of US states being sued by the Commodity Futures Trading Commission, as the agency insists on its jurisdiction over prediction markets traded by companies such as Kalshi and Crypto.com.
Several states have gone after these companies, accusing them of violating state gambling laws through bets made on the growing platforms, but CFTC Chairman Mike Selig has led legal action against states including New York, Arizona, Illinois and Connecticut. He argued that the derivatives regulator, which he heads as the sole member of what is supposed to be a five-member commission, has “exclusive jurisdiction” over the trading of event-driven contracts that he says are an emerging form of the same type of derivatives activity long handled by the CFTC.
Last week, Wisconsin sued Kalshi, Coinbase, Polymarket, Robinhood and Crypto.com for running unlicensed gaming operations in the state – echoing claims made against the industry elsewhere.
Selig has now responded in the U.S. District Court for the Eastern District of Wisconsin and said he was trying to send a message: “If you interfere with the operation of federal law in regulating financial markets, we will sue you.”
Also last week, New York sued Coinbase and Gemini over their prediction markets activities, and days later the CFTC responded with its own lawsuit against the state.
Arizona filed a criminal case against Kalshi, but a court stayed the prosecution earlier this month, with the judge saying the federal agency would likely succeed in arguing that U.S. law would preempt state gambling laws.
Read more: US CFTC adds New York to series of states it’s suing to end prediction market decline
