CFTC Expands Legal Efforts Against States Challenging Prediction Markets
- Wisconsin has been sued by the CFTC for asserting jurisdiction over prediction markets, including those operated by Kalshi and Crypto.com.
- CFTC Chairman Mike Selig claims the agency has “exclusive jurisdiction” over event contracts, which are viewed as derivatives.
- The lawsuit follows similar actions against Coinbase, Polymarket, Robinhood, and others for running unlicensed gambling operations in Wisconsin.
- New York also filed a lawsuit against Coinbase and Gemini regarding their prediction markets, prompting a CFTC counter-suit.
- A court in Arizona paused criminal proceedings against Kalshi, indicating that federal law may preempt state gambling laws.
The CFTC’s legal actions highlight its commitment to regulate prediction markets amid increasing state-level challenges to their operations. This ongoing conflict emphasizes the tension between federal oversight and state gaming laws in the evolving financial landscape.
In total, multiple states including Wisconsin and New York are facing lawsuits from the CFTC as it defends its authority over prediction market trading activities.(Source)
