CFTC Sues Wisconsin to Reaffirm its Exclusive Jurisdiction Over Prediction Markets

WASHINGTON - The Commodity Futures Trading Commission filed a lawsuit against Wisconsin in response to the state's lawsuits against Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase, five CFTC-regulated prediction markets. Less than one week ago, Wisconsin filed civil suits against the companies, asserting felony violations of state law.

The CFTC's latest lawsuit comes just a few days after the Commission sued New York, right after New York filed its own lawsuit against prediction markets.

Congress assigned exclusive jurisdiction over the regulation of various derivative products to the CFTC decades ago, including over event contracts traded on designated contract markets, or DCMs. Despite this, some states have attempted to assert jurisdiction to regulate prediction markets via state gambling laws.

"States cannot circumvent the clear directive of Congress," said Chairman Michael S. Selig. "Our message to Wisconsin is the same as to New York, Arizona, and others: if you interfere with the operation of federal law in regulating financial markets, we will sue you."

In a lawsuit filed by the CFTC, a federal court in Arizona recently issued a temporary restraining order blocking an Arizona criminal prosecution against a CFTC-regulated company. The Commission has also filed lawsuits against Connecticut, Illinois, and New York, and has filed amicus briefs in the U.S. Court of Appeals for the Ninth Circuit and the Supreme Judicial Court of Massachusetts.