Wisconsin has joined the growing number of U.S. states sued by the Commodity Futures Trading Commission as that agency insists on jurisdiction over prediction markets traded by companies like Kalshi and Crypto.com.
Several states have gone after those companies, accusing them of violating state gambling laws through bets placed on the growing platforms, but CFTC Chairman Mike Selig has led a legal response 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 supposed to be a five-member commission, has “exclusive jurisdiction” over the trading of event 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 conducting unlicensed gaming operations in the state, echoing accusations leveled 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 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 businesses, and days later, the CFTC responded with its own lawsuit against the state.
Arizona has been pursuing a criminal case against Kalshi, but a court there halted prosecution earlier this month, with the judge arguing that the federal agency is likely to succeed in upholding that U.S. law will prevail over state gambling laws.
Read more: US CFTC adds New York to a host of states suing to stop prediction market pullback
