Federal-state tensions rise as CFTC targets another state in betting probe
The Commodity Futures Trading Commission (CFTC) has intensified its legal battle over prediction markets, filing a new federal lawsuit against Wisconsin, making it the fifth U.S. state targeted in its escalating crackdown on state-level enforcement actions. The lawsuit, filed Tuesday alongside the U.S. Department of Justice in the Eastern District of Wisconsin, argues that Wisconsin overstepped its authority by suing five prediction market platforms last week, including Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase. The federal regulator says those actions interfere with its exclusive jurisdiction over federally regulated derivatives markets under the Commodity Exchange Act. In its complaint, the CFTC said Wisconsins attempt to “criminalize and shut down federally regulated markets” undermines the national framework Congress established for overseeing swaps and event contracts. The agency maintains that prediction markets fall under federal derivatives law rather than state gambling statutes, creating a direct conflict between Washington and state regulators. Still letting the bank keep the best part? Watch our free video on being your own bank.