The CFTC on Tuesday filed a lawsuit against the state of Wisconsin over the state’s own lawsuit against top prediction market platforms, in the latest escalation of a jurisdictional standoff over the fate of the lucrative new sector.
All states targeted by the CFTC thus far, including Wisconsin, feature Democratic governors and attorneys general. The CFTC is currently chaired by Donald Trump appointee Mike Selig.
But the growing conflict between states and the Trump administration over prediction markets is by no means partisan. In the last year, numerous red states—including Tennessee, Utah, and Ohio—have expressed opposition to the federal government’s aggressively pro-prediction market stance.
The states, red and blue alike, contend prediction market wagers related to sports—and in some cases, politics and entertainment—are illegal gambling bets, lacking necessary registration with state gambling authorities. The prediction market platforms themselves have argued the wagers instead constitute event contracts exclusively under the federal purview of the CFTC. In recent months, the CFTC has full-throatedly backed the platforms’ position.
“States cannot circumvent the clear directive of Congress,” CFTC chair Mike Selig said in a statement Tuesday. “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 Wisconsin lawsuits focused on those platforms’ sports-related prediction markets, which the states’ attorney general argued are unregistered sports bets. Lawsuits filed by other states, however, including New York and Arizona, have been broader, targeting not just sports-related wagers but also those pertaining to elections and popular culture.
