The legal battle over prediction markets could be heading for the US Supreme Court, according to the Vice President of Legal and Head of Litigation at Coinbase, Ryan VanGrack.
In comments made to WISN12, VanGrack was responding to a lawsuit filed by Wisconsin Attorney General Josh Kaul against prediction market companies, including Coinbase.
Kaul had accused the platforms of operating unregulated sports betting services within the state, but VanGrack argued that the companies were already federally regulated by the Commodity Futures Trading Commission (CFTC).
“Ultimately, they’re suing based on a fundamental misunderstanding. They are presenting these issues as being whether these markets are regulated by a state regulator or no regulator, but that actually has it backwards. These are already being regulated by a federal regulator,” he said.
The CFTC has launched its own legal challenge against Wisconsin, arguing that the federal government has sole authority over prediction markets, an argument that the Attorney General described as a ‘novel theory of the law’.
Kaul also pointed out that US states had been regulating gambling for most of their history, and that the law the CFTC was relying on in its lawsuit, which related to the Great Depression of the 1930s, had little relevance today.
The Attorney General also rebutted suggestions that the state’s lawsuit was prompted by political pressure from the tribes, and emphasized that the rise of online prediction markets had triggered both legal disputes and legislative debate in Wisconsin, and that the issue was now likely to be settled in the courts.