The Commodity Futures Trading Commission has sued the state of Wisconsin to block its attempt to enforce gambling laws against federally regulated prediction market platforms. According to a statement from the Commodity Futures Trading Commission, the lawsuit responds directly to Wisconsin’s recent legal action against Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase, all identified by the agency as operating under its regulatory framework. CFTC Chairman Michael Selig said states “cannot circumvent the clear directive of Congress,” adding that similar warnings have already been issued to New York, Arizona, and other states pursuing comparable enforcement. According to Selig, any interference with federal financial market regulation would trigger legal action from the agency. “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," he added. Filed in a Wisconsin federal court alongside the US Department of Justice’s Civil Division, the complaint argues that event-based contracts listed on designated contract markets fall under exclusive federal oversight. The CFTC wrote that Wisconsin’s effort to shut down these platforms “intrudes on the exclusive federal scheme Congress designed to oversee national swaps markets.” Wisconsin’s lawsuit, filed last week, claimed that contracts tied to sports outcomes amount to illegal betting under state law and require gaming licenses. State prosecutors, including Attorney General Josh Kaul, have argued in earlier filings that users pay to take positions on real-world events and receive fixed payouts, a structure the state considers equivalent to wagering. Federal authority faces coordinated state challenge Legal pressure has been building across multiple states, with New York, Arizona, Connecticut, Illinois, and Nevada pursuing similar actions against prediction market firms . Earlier filings from New York Attorney General Letitia James described such contracts as unlicensed gambling products, while Wisconsin pointed to platform marketing language and fee structures as evidence of betting activity. Platforms and federal regulators have consistently rejected those claims. Companies operating through Kalshi maintain that these contracts qualify as swaps regulated under federal commodities law, not state gambling statutes. The CFTC’s latest complaint seeks a court ruling that state-level gambling laws do not apply to federally registered exchanges offering event contracts. It has also asked for a permanent injunction to prevent Wisconsin from taking further enforcement action against these platforms. Named defendants in the case include Wisconsin Governor Tony Evers, Attorney General Josh Kaul, the state’s Division of Gaming, and its administrator John Dillett. A similar legal move was made days earlier against New York , where the CFTC argued in federal court filings that state enforcement could undermine its authority over prediction markets. Court battles in multiple jurisdictions now point toward a larger constitutional question over whether event-based contracts fall solely under federal oversight or remain subject to state gambling rules. The post CFTC sues Wisconsin over prediction market crackdown appeared first on Invezz
