SCOTUS Will 'Likely' Rule On Prediction Markets Oversight, Argues Coinbase
The Supreme Court is likely to rule over who has regulatory oversight over prediction markets, a Coinbase spokesman has argued. Speaking to WISN2, Coinbase’s Ryan VanGrack said that state regulators may have over-reached in their interpretation of the law.
In a WISN2 interview, the vice-president of legal and head of litigation for Coinbase said, “Ultimately, they [states] are suing based on a fundamental misunderstanding. They are presenting these issues as being whether these [prediction] markets are regulated by the state regulator or no regulator.
“Actually, these are already regulated by a federal regulator [the Commodity & Futures Trade Commission]."
At a Glance:
- Wisconsin among the states being sued by the CFTC over state regulation
- Wisconsin tribe permitted to claim against prediction giant, Kalshi
- Disagreements in other states could lead to a Supreme Court ruling this year
- Coinbase itself launched prediction markets in December
- Prediction markets were later rolled out to all U.S. customers in January
Wisconsin accuses prediction markets of 'flouting the law'
Like many states over the past few months, Wisconsin had filed cease-and-desist letters against prediction markets. The state argues that prediction markets constitute online sports betting and are therefore subject to both state regulation and taxation.
However, the CFTC countered with a legal challenge last week, arguing that only it has jurisdiction over prediction platforms.
The key disagreement is over what prediction platforms like Kalshi are. States like Wisconsin, Arizona, and New Jersey say they are no different from online sportsbooks.
However, the CFTC says they are more similar to derivatives markets rather than fixed-odds bookmakers. Currently, the CFTC has federal jurisdiction over this.
The CFTC has been flexing its muscles in 2026. It sued New York earlier this month over the state's interference with prediction market platforms.
Meanwhile, Arizona has failed in an attempt to bring a criminal case against Kalshi.
Wisconsin tribe weighs in with legal case on predictions
There was another twist in the tale of Wisconsin vs. prediction markets this week. A federal judge in the Badger State is allowing the Ho-Chunk Nation to sue Kalshi under the Indian Gaming Regulatory Act (IGRA).
U.S. players can access Kalshi on their mobile phones or laptops on tribal land. The Ho-Chunk Nation argues, therefore, that prediction markets come under tribal gambling rules.
Other similar rulings on the IGRA have agreed that online betting on tribal land is regulated by the tribe itself. That may put Kalshi in a tricky spot if its prediction platform is found to have violated tribal law.
