- The federal government is suing Wisconsin after the state filed a lawsuit against prediction market apps.
- Wisconsin sued prediction market companies like Kalshi and Coinbase on Thursday.
- The Commodity Futures Trading Commission has also filed lawsuits against Arizona, New York, Connecticut, and other states.
MADISON, Wisc. – The Commodity Futures Trading Commission (CFTC) is suing Wisconsin in response to the state’s lawsuit against prediction market companies. Wisconsin’s lawsuit alleges that Kalshi and other prediction market apps “facilitate illegal sports betting”, but the federal government claims that the CFTC has exclusive regulative jurisdiction over event contracts.
“States cannot circumvent the clear directive of Congress,” said Chairman Michael S. Selig in a press release. “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.”
The blurred lines of legal sports betting and sports-related event contracts has resulted in the federal government suing state governments. The CFTC’s lawsuit attempts to reaffirm their exclusive rights to regulate prediction markets and prevent states from deciding if these event contracts are legal or not.
Wisconsin Lawsuit Sparks Federal Lawsuit Retaliation
Just days ago, Wisconsin sued Kalshi, Coinbase, Crypto.com, Robinhood, Polymarket, and all affiliates of these companies for violating state gambling laws. The lawsuit alleges that these companies offer illegal betting that too closely resembles legal Wisconsin sports betting markets, which is reserved for local tribes.
The five prediction market companies listed in the lawsuit claim their offerings are “event contracts” and not a “bet” as they’re labeled in the Wisconsin lawsuit. The state wants these companies blocked from accepting Wisconsin residents and offering any of their so-called “event contracts.”
