CFTC Files Lawsuit Against Wisconsin Over Prediction Markets

Wisconsin is the latest state to feel the wrath of the Commodity Futures Trading Commission.

The CFTC announced it was filing a lawsuit against the state over its legal actions against Kalshi, Polymarkets, Crypto.com, Robinhood, and Coinbase. The federal regulator accused the state of blatantly rejecting the Commodity Exchange Act (CEA), which grants the federal regulator exclusive jurisdiction over the industry. 

Wisconsin is the fifth state to be sued by the CFTC, joining Arizona, Connecticut, Illinois, and New York. 

“States cannot circumvent the clear directive of Congress,” CFTC Chairman Michael Selig shared 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.”

Like many other markets, Wisconsin has viewed sports prediction markets as a form of sports betting. However, the CFTC asserts that these controversial markets qualify as “swaps,” which are protected under the CEA. 

The lawsuit will allow the prediction platform to continue to operate in the Badger State and avoid any corresponding fines.

CFTC continues fight despite public opinion

Lawmakers on both sides of the aisle have been fighting to either regulate or ban the industry, but support from the White House has kept that from happening. While the CFTC and prediction operators have accused those opponents of acting out of greed, it appears they have the support of their constituents.

A recent Siena poll found that 65% of Americans believe prediction markets are a form of gambling and should be subjected to those laws. It also found that 73% of men ages 18-49, the industry’s largest demographic, shared that opinion. 

The CFTC has tried to ease concerns about its ability to protect the integrity of prediction markets and has promised that regulations are coming. However, the Siena poll confirmed that the message hasn’t eased the public’s concerns.