Oneida Casino sports betting, Feb. 10, 2023. PC: Fox 11 Online
(WTAQ-WLUK) — Online prediction markets have pitted the state of Wisconsin and the federal government against one another.
The U.S. and Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Wisconsin in response to civil suits the state filed against five websites last week. Online prediction markets allow people to bet on everything from sports matchups to political races and gas prices.
In Wisconsin’s lawsuit against the prediction markets, Democratic Attorney General Josh Kaul argues the prediction markets “are working together to facilitate illegal sports betting throughout the state.”
Kaul said they “use a fig leaf to disguise the casino-style betting they facilitate in Wisconsin” by relabeling their sports bets as event contracts.
“They’re just siphoning money out of the state of Wisconsin,” said Oneida Nation Chairman Tehassi Hill.
Hill said tribes sent a letter to Kaul in November urging him to look into prediction markets, saying they should have to operate under the same regulations as tribes do for gambling.
“With these prediction markets, none of that is in place,” said Hill. “There’s no way to be assured there’s the sort of protection and making sure there’s processes in place to address problem gambling.”
“That just wastes your own state’s taxpayer dollars in suing participants that are complying with federal law,” said Michael Selig, the chair of the CFTC during an April 13 legislative committee hearing.
In the hearing, Selig made it clear he believes his agency has exclusive jurisdiction over regulating prediction markets. That is reiterated in the lawsuit his agency and the federal government filed against Wisconsin in response to the legal action against the websites.
“If you want to fight with us, we’ll fight with you in court, but the real work should be done in the policy spectrum,” said Selig. “Come in to comment and we’ll work with you all to get the policy right.”
The commission has filed lawsuits against four other states for similar situations.
Wisconsin recently passed legislation allowing for online sports betting. However, wagers must be processed through servers located on Tribal lands.
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