CFTC Sues Wisconsin to Block Closure of Prediction Markets

The U.S. Commodity Futures Trading Commission filed a federal lawsuit against Wisconsin on April 28, 2026, asking a judge to prevent state enforcement actions that seek to close prediction market platforms including Kalshi and Polymarket.

Wisconsin Attorney General Josh Kaul filed three civil suits on April 23 in Dane County Circuit Court against Kalshi, Polymarket, Foris Dax Markets/Crypto.com and affiliated companies, naming Robinhood and Coinbase among defendants. The state alleges the platforms’ sports-outcome contracts violate Wisconsin’s criminal statute on sports betting, Wis. Stat. 945.03(1m), and has asked courts to block their operations in the state.

In court filings, Kaul wrote, “Thinly disguising unlawful conduct doesn’t make it lawful. These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.”

The CFTC moved into federal court days later, asking the judge to enjoin Wisconsin’s suits and to assert federal preemption. The agency contends Congress gave it exclusive authority over derivatives traded on registered exchanges and that state gambling claims conflict with that law. CFTC Chairman Michael Selig wrote, “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.”

At issue are event contracts, financial instruments that pay out based on real-world outcomes such as sports results or elections. Kalshi operates as a CFTC-registered designated contract market and treats its outcome contracts as swaps subject to federal oversight. Wisconsin’s complaints describe the same products as bookmaking subject to state criminal law.

The CFTC has filed similar suits against Arizona, Connecticut, Illinois and New York in April 2026. In Arizona the agency obtained a temporary restraining order against state enforcement. Platforms and the agency cite precedent from the Third Circuit Court of Appeals in arguing for federal preemption. Coinbase Chief Legal Officer Paul Grewal and representatives for Robinhood and Kalshi have challenged state actions in court filings.

Wisconsin’s complaints include financial figures, saying Kalshi earns more than $1 billion annually from sports contracts and that sports contracts represent roughly 90% of its revenue, according to court papers. The state notes that online sports betting in Wisconsin is largely illegal except where authorized by limited tribal gaming compacts.

Legal experts say the dispute over whether sports event contracts fall under CFTC authority or state gambling law could reach the U.S. Supreme Court. Until courts resolve the issue, users in states with active litigation could face service interruptions or access limits while platforms continue operating under federal registration and oversight.