Feds sue Wisconsin to block state prediction market ban
Federal authorities sued Wisconsin over its regulation of prediction markets, escalating a conflict between state gambling laws and the emerging prediction-market industry. Wisconsin had accused Robinhood and Coinbase of facilitating activity it treated as illegal gambling, arguing that event contracts were no different than ordinary sports bets. The state's law is scheduled to go into effect Aug. 1. The federal lawsuit comes as a related prediction market legal dispute advances toward the Supreme Court, with the potential to determine whether major U.S. trading platforms will be permitted to offer event contracts.
A federal win arms the CFTC's parallel suits in Pennsylvania, Ohio, and Minnesota with binding precedent. Kalshi, Robinhood, and Coinbase would then face geoblocking across four states rather than uniform federal access.
Becomes the second federal lawsuit filed by the CFTC this week to block a state-level prediction-market ban, after parallel action against Minnesota, as the agency wages a multi-front preemption campaign across Wisconsin, Pennsylvania, and Ohio.