Wisconsin has joined the growing number of US states being sued by the Commodity Futures Trading Commission as the agency insists on its jurisdiction over prediction markets that trade at firms such as Kalshi and Crypto.com.
Several states have gone after these companies, accusing them of violating state gambling laws via betting that takes place on the growing platforms, but CFTC Chairman Mike Selig has led a legal pushback against states including New York, Arizona, Illinois and Connecticut. He has argued that the derivatives regulator, which he heads as the sole member of what is meant to be a five-member commission, has “exclusive jurisdiction” over trading in event contracts, which he argues are a new form of the same kind of derivatives activity the CFTC has long handled.
Last week, Wisconsin sued Kalshi, Coinbase, Polymarket, Robinhood and Crypto.com for running unlicensed gaming operations in the state — in line with claims made against the industry elsewhere.
Selig has now responded in the US District Court for the Eastern District of Wisconsin, saying he is trying to send a message: “If you interfere with the function of federal law in regulating the financial markets, we will sue you.”
Also last week, New York sued Coinbase and Gemini over their prediction market businesses, and days later the CFTC responded with its own lawsuit against the state.
Arizona has pursued a criminal case against Kalshi, but a court put the prosecution on hold earlier this month, with the judge arguing that the federal agency is likely to succeed in making its case that the US law will preempt state gambling laws.
Read more: US CFTC adds New York to list of states suing to stop market prediction kickbacks
