Wisconsin takes aim at prediction markets, suing Kalshi, Polymarket, Coinbase, Robinhood and Crypto.com
Wisconsin Attorney General Josh Kaul has sued a slate of prediction-market platforms — Kalshi, Polymarket, Coinbase, Robinhood and Crypto.com (and their affiliates) — in Dane County court, arguing their sports-related contracts amount to unlawful gambling and should be barred from serving Wisconsin residents.
The complaints ask the court for declarations that offering sports-event contracts to Wisconsin customers violates state law (Wis. Stat. § 945.03(1m)) and constitutes a public nuisance. Kaul’s office cited the platforms’ own marketing as evidence: filings point to Kalshi Instagram ads calling it “The First Nationwide Legal Sports Betting Platform” and Polymarket’s description of prediction markets as “a platform where people can bet on the outcome of future events.” The state also alleges that Kalshi generates more than $1 billion annually from sports contracts — roughly 90% of its estimated revenue.
Wisconsin’s action comes amid a wave of enforcement moves around prediction markets. New York Attorney General Letitia James filed a similar suit this week against Coinbase and Gemini, saying their “so‑called prediction markets are just illegal gambling operations” and that regulators must act to protect young people and curb platforms “that lack the necessary guardrails.”
The state-level scrutiny sits alongside a growing federal‑state tug of war over who regulates these markets. The Department of Justice and the Commodity Futures Trading Commission (CFTC) have sued Connecticut, Arizona and Illinois for trying to enact their own rules for platforms like Kalshi and Polymarket. CFTC Chair Michael Selig has warned that permitting a patchwork of state regimes would undermine the agency’s exclusive authority, risk driving operators offshore and create systemic dangers reminiscent of past crypto collapses.
Regulatory pressure is mounting on several fronts: two senators introduced a bipartisan proposal last month that would ban sports prediction markets outright; New York and Illinois have forbidden government employees from trading on these platforms over insider‑information concerns; and federal prosecutors charged a U.S. Army soldier this week for allegedly using classified information to place Polymarket trades tied to a January operation aimed at removing Venezuelan President Nicolás Maduro.
For prediction‑market operators — many of them native to the crypto ecosystem — the Wisconsin lawsuit is the latest sign that legal and legislative headwinds are intensifying, leaving firms to navigate conflicting demands from state attorneys general, Congress, and federal regulators.
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