CFTC sues Wisconsin escalating federal-state clash over prediction market oversight

The Commodity Futures Trading Commission is pushing back against the state of Wisconsin with its own lawsuit against the governor and other government officials after they sued several prediction markets last week.

On Tuesday, the agency filed a lawsuit against Democratic Gov. Tony Evers, Attorney General Joshua Kaul and the administrator of the Wisconsin Department of Administration Division of Gaming, John Dillett, in the U.S. District Court for the Eastern District of Wisconsin.

In the complaint, the CFTC again asserted its “exclusive jurisdiction” over prediction markets, as it has with other states its sued over the past month. This comes just days after Wisconsin filed complaints against Coinbase, Robinhood, Crypto.com, Polymarket and Kalshi seeking to abate what it calls a “public nuisance” stemming from their sports-related event contract offerings. 

“Wisconsin’s attempt to criminalize and shut down federally regulated markets intrudes on the exclusive federal scheme Congress designed to oversee national swaps markets,” the CFTC said on Tuesday in its complaint.

This now marks the fifth state the CFTC has sued over the past month, including Illinois, Arizona, Connecticut and New York, in its fight to assert its oversight over prediction markets, which are only gaining more and more traction.  Those platforms have surged in popularity in recent years, particularly after the 2024 U.S. presidential election cycle.

CFTC Chair Michael Selig has embarked on rulemaking and has said that the agency has a broad statute, despite pushback from states that say platforms are violating local gaming and gambling laws, particularly related to sports-related bets.

Last week, a bipartisan coalition of 37 attorneys general, including those from states such as New York and Oklahoma, filed an amicus brief urging a Massachusetts court to uphold a January ruling that Kalshi cannot offer sports event contracts to in-state residents without a Massachusetts Gaming Commission license. 

“If Congress meant to overturn the long tradition of state regulation over gambling that dates to the founding of the country, it needed to have said so clearly,” said the group alongside New York Attorney General Letitia James in the statement. “As Attorney General James and the coalition argue, the CFTC cannot claim exclusive authority to regulate the multibillion-dollar gambling industry based on a provision of law that does not even mention gambling at all.”

The CFTC is asking the Wisconsin court to issue an injunction, among other requests. 

“This Court should put an end to the ongoing efforts by defendants to undermine the uniform application of federal law by declaring that Wisconsin gambling and betting bans or regulations are preempted by federal law as applied to event contract swaps listed for trading on CFTC-regulated DCMs and are thus unlawful,” the CFTC said in the complaint. 

© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.