Overview
- The federal commodities regulator, joined by the Justice Department’s Civil Division, filed the Wisconsin case Tuesday in federal court seeking a declaratory ruling and a permanent injunction.
- Wisconsin had sued Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase days earlier, saying their sports outcome markets are unlicensed bets with fixed payouts that fit the state’s definition of gambling.
- The CFTC says these yes-or-no event contracts function as derivatives known as swaps traded on regulated exchanges, which it argues fall under its exclusive authority granted by Congress.
- This Wisconsin suit is the agency’s fifth against a state this month after actions targeting New York, Arizona, Connecticut, and Illinois, and follows an Arizona judge’s pause of a criminal case against Kalshi and a Third Circuit opinion that backed the CFTC’s treatment of some contracts.
- The outcome could decide whether platforms operate under one federal rulebook or face varied state-by-state restrictions, a choice that would shape where users can trade and what protections apply.