Darius Baruo
Apr 29, 2026 05:36
The CFTC has sued Wisconsin, marking its fifth state-level legal battle to assert jurisdiction over prediction markets like Kalshi and Polymarket.
The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Wisconsin, escalating efforts to assert federal jurisdiction over prediction markets. This marks the agency’s fifth such legal challenge against a U.S. state, following similar actions against New York, Arizona, Connecticut, and Illinois in recent weeks.
The dispute stems from Wisconsin’s lawsuits against five major platforms—Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase—alleging that their event-based contracts constitute illegal gambling under state law. Wisconsin argues these platforms require state gaming licenses to operate legally. In response, the CFTC claims exclusive authority over these markets under federal law, categorizing them as designated contract markets regulated by the agency.
“States cannot circumvent the clear directive of Congress,” said CFTC Chairman Michael Selig in a statement accompanying the lawsuit. The agency filed its complaint in federal court on Tuesday, supported by the Justice Department’s Civil Division, seeking to block Wisconsin from enforcing its gambling laws on federally regulated platforms.
At the heart of the conflict is the classification of prediction markets offering event-based contracts, including those tied to sports outcomes. While state authorities view these as gambling, the CFTC and the platforms maintain they are financial instruments overseen exclusively by federal regulators. The CFTC is asking the court to issue a permanent injunction prohibiting Wisconsin from pursuing legal action against platforms operating under federal regulation.
Wisconsin’s lawsuit, filed last Thursday, named Kalshi, Polymarket, and others as defendants and targeted what it described as illegal sports betting activities. The state’s legal action follows a broader trend of state-level crackdowns on prediction markets, which has drawn federal pushback in recent months.
The CFTC’s complaint explicitly names Wisconsin Governor Anthony Evers, Attorney General Josh Kaul, and the state’s Gaming Division administrator, John Dillett. The agency argues that Wisconsin’s enforcement efforts “intrude on the exclusive federal scheme Congress designed to oversee national swaps markets.”
The Wisconsin Department of Justice and Governor Evers’ office have not yet commented on the lawsuit. The outcome of this legal battle could set a significant precedent for the jurisdictional boundaries between federal and state authorities in regulating emerging financial markets.
As the regulatory standoff unfolds, prediction markets now face heightened scrutiny not just from state authorities but also from the courts. Traders and platforms alike will be closely watching for any rulings that clarify the legal framework governing event-based financial contracts.
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