The Commodity Futures Trading Commission (CFTC) has sued the State of Wisconsin after the state brought civil actions against Kalshi, Polymarket, Crypto.com, Robinhood and Coinbase over prediction market activity.
The action, filed on 28 April 2026, extends a widening federal-state dispute over the regulatory treatment of event contracts. The CFTC argues that Congress gave the agency exclusive jurisdiction over specified derivatives products, including event contracts traded on designated contract markets (DCMs), and that states cannot use gambling laws to disrupt federally regulated market activity.
The Wisconsin case follows similar CFTC action against New York, after that state also sued prediction market operators. The Commission has also filed lawsuits against Connecticut and Illinois and has intervened through amicus briefs in cases before the U.S. Court of Appeals for the Ninth Circuit and the Supreme Judicial Court of Massachusetts.
“States cannot circumvent the clear directive of Congress,” said CFTC Chairman Michael S. Selig. “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 dispute is becoming an important test of the regulatory perimeter around prediction markets. For regulated venues and intermediaries, the outcome could determine whether sports-related event contracts remain primarily a federal derivatives-market issue or face a more fragmented state-by-state enforcement environment. The CFTC has already secured a temporary restraining order in Arizona blocking a state criminal prosecution against a CFTC-regulated company, giving the agency an early procedural win in its broader jurisdictional campaign.
Subscribe to our newsletter
