The U.S. Commodity Futures Trading Commission (CFTC) has sued the state of Wisconsin after Wisconsin moved to restrict prediction market platforms, Decrypt reported.

According to the report, Wisconsin recently filed lawsuits targeting major prediction market operators and related platforms including Polymarket, Kalshi, Coinbase, Robinhood and Crypto.com. The state’s attorney general argued that sports-related markets on those platforms amount to unlicensed sports betting.

Decrypt said the CFTC’s lawsuit against Wisconsin is part of a widening federal campaign: the agency has sued multiple states in recent weeks after they attempted to apply state gambling laws to prediction market offerings. The CFTC’s position is that event contracts fall under the agency’s federal derivatives authority, and that states cannot override that framework.

CFTC Chair Mike Selig, cited by Decrypt, said states cannot “circumvent” Congress’s directive on federal market regulation and warned the agency would sue states that interfere with federal law.

The dispute highlights the regulatory gray area surrounding prediction markets that mix finance and wagering-like experiences. While platforms argue they operate derivatives markets overseen by the CFTC, states contend that at least some contracts—especially sports outcomes—should be regulated as gambling.

The outcome of these lawsuits could shape how crypto-adjacent prediction markets operate in the U.S., including what products can be offered to retail users and under which licenses.