CFTC sues Wisconsin in agency’s legal campaign defending prediction markets authority
The U.S. Commodity Futures Trading Commission added Wisconsin to the list of states it’s sued over event-contract jurisdiction, most recently New York.
What to know:
- Wisconsin has become the latest state sued by the U.S. Commodity Futures Trading Commission in a fight over whether states have jurisdiction over prediction markets as gambling platforms or whether the CFTC has solo authority as the federal regulator of derivatives.
- Last week, Wisconsin sued several of the businesses, including Kalshi, Polymarket and Coinbase, and days later, the CFTC is suing the state in federal court.
In this article
Several states have gone after those businesses, accusing them of violating state gaming laws via the betting taking 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’s argued that the derivatives regulator, which he leads as the sole member of what’s meant to be a five-member commission, has “exclusive jurisdiction” over the trading of event contracts that he argues are an emerging form of the same kinds of derivatives activity long handled by the CFTC.
Last week, Wisconsin sued Kalshi, Coinbase, Polymarket, Robinhood and Crypto.com for running unlicensed gambling operations in the state — echoing the claims made against the industry elsewhere.
Selig has now responded in the U.S. District Court for the Eastern District of Wisconsin, said he’s trying to send a message: “If you interfere with the operation of federal law in regulating financial markets, we will sue you.”
