The U.S. Commodity Futures Trading Commission has sued Wisconsin officials to stop state lawsuits targeting prediction market platforms, including Kalshi, Coinbase, and Polymarket.
The federal complaint, filed on Tuesday, seeks to block recent lawsuits brought by Wisconsin authorities, arguing that the state’s actions interfere with the CFTC’s authority to regulate financial markets, the Milwaukee Journal Sentinel reported.
The commission contends that prediction markets fall under federal jurisdiction and should not be subject to state gambling laws.
CFTC Chairman Michael Selig said the lawsuits are necessary to prevent states from overstepping their authority. “States cannot circumvent the clear directive of Congress,” Selig said. “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 legal clash follows three lawsuits filed on April 23 by Wisconsin Attorney General Josh Kaul in Dane County Circuit Court. Kaul said that the companies were operating illegal gambling schemes by labeling sports betting products as “event contracts.” The cases were moved to federal court the following day.
Kaul defended the state’s position, arguing that rebranding gambling activities does not exempt companies from compliance with state law.
“Unlawful conduct doesn’t suddenly become permissible just because you call it something different,” Kaul said. He added that a bipartisan group of state attorneys general has opposed the federal government’s stance, calling it an overreach that undermines states’ ability to protect residents.
Wisconsin is seeking a court ruling to declare such activities illegal and prohibit them within the state. However, attorneys for Kalshi, Coinbase, and other firms maintain that their operations are governed exclusively by federal regulators.
The dispute is part of a broader legal campaign by the CFTC, which has filed similar lawsuits against Arizona, Connecticut, Illinois, and New York over state-level attempts to regulate prediction markets.
Ryan VanGrack, Senior Legal Executive at Coinbase, said the federal action signals a turning point. “By moving to block state encroachment, the Commission has sent an unmistakable signal: the era of jurisdictional ambiguity is over,” VanGrack, who leads the company’s legal division, stated. “Federal law is not a suggestion—it is the exclusive authority governing these markets.”
Original article: https://www.yogonet.com/international/news/2026/04/29/118912-cftc-sues-wisconsin-over-prediction-market-crackdown
