CFTC sues Wisconsin over prediction market regulations

The Commodity Futures Trading Commission (CFTC) sued Wisconsin and key state officials Tuesday over their recent crackdown on prediction markets, arguing the federal regulator has exclusive jurisdiction over the platforms.

The agency took aim at the Badger State for suing five prediction markets — Coinbase, Kalshi, Robinhood, Polymarket and Crypto.com — for allegedly running illegal sports betting operations.

Wisconsin is the fifth state to face a lawsuit from the CFTC, which has vowed to challenge state efforts to regulate the platforms that it contends are under its purview.

“States cannot circumvent the clear directive of Congress,” CFTC Chair Michael Selig said in a statement. “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.”

Shortly after taking the reins at the CFTC, Selig announced his plans to challenge states over prediction market regulations. The platforms, which had already been duking it out in court with the states, gained a key ally in the new chair amid the legal battles.

The CFTC filed lawsuits against Arizona, Connecticut and Illinois in early April over their efforts to place restrictions on prediction markets operating within their borders. The agency also sued New York on Friday, just days after the state accused Coinbase and Gemini of violating its gambling laws.