The Badger State has joined the growing battle against prediction market platforms in court.
Key Takeaways
- Wisconsin’s Attorney General calls prediction market platforms’ sports contracts “unlawful.”
- The Badger State is threatening punitive measures and is requesting preliminary and permanent injunctions.
- Wisconsin currently only allows retail sports betting, although online wagering could be coming eventually.
The Wisconsin Department of Justice announced on Thursday that the state has filed lawsuits against Kalshi, Robinhood, Polymarket, Coinbase, and Crypto.com. The complaints include any affiliates of those trading exchanges.
Wisconsin alleges that prediction market platforms are operating unlawful commercial gambling through illegal sports betting in a state that currently only offers retail wagering.
“Thinly disguising unlawful conduct doesn’t make it lawful,” Wisconsin Attorney General Josh Kaul said. “These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.”
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Time to respond
Wisconsin lawmakers recently approved a bill that could bring online sports betting to the Badger State, but a long process and work with tribal nations remains. In the meantime, state authorities are looking to punish prediction market operators.
The lawsuits, filed in Dane County, Wisconsin, allege that those prediction companies are “creating a public nuisance.” The state has requested preliminary and permanent injunctions to keep trading exchanges from offering sports outcome contracts there, and Haul is looking to enforce the law against them.
“If you do not provide a proper answer within twenty (20) days, the court may grant judgment against you for the award of money or other legal action requested in the complaint, and you may lose your right to object to anything that is or may be incorrect in the complaint,” Haul wrote to several of the prediction platforms. “A judgment may be enforced as provided by law. A judgment awarding money may become a lien against any real estate you own now or in the future and may also be enforced by garnishment or seizure of property.”
Allegedly running afoul
Prediction platforms like Kalshi and Polymarket offer sports event contracts that more than a dozen U.S. states deem as unlawful sports betting.
Wisconsin authorities claim these listed trading exchanges are paying out “bets” on sports-related outcome odds and allege that operators are collecting a fee for every trade, which goes against the state’s gambling laws.
Wisconsin noted that Kalshi has reportedly generated $1 billion in revenue from sports event contracts, making up 90% of the operator’s estimated annualized profit.
Battle continues
Nevada became the first U.S. state to successfully and legally keep a trading exchange from operating in a jurisdiction when it won a permanent injunction against Kalshi earlier this month.
Kalshi, Crypto.com, Coinbase, and others have also filed lawsuits of their own against several other states in an effort to avoid punitive measures in legal sports betting jurisdictions. These trading exchanges argue that they are regulated by the Commodity Futures Trading Commission, a federal agency, and don’t have to abide by state regulations that require licenses to operate.
The CFTC has backed prediction companies by suing Arizona, Illinois, and Connecticut after those states issued cease-and-desist orders to several trading exchanges. The ongoing prediction market news and legal battles across the country are expected to continue through 2026 and could eventually end up in the U.S. Supreme Court.
