Wisconsin Sues Prediction Markets Over Sports Betting Contracts

Wisconsin Attorney General Josh Kaul has sued Kalshi, Polymarket, Robinhood, Crypto.com, and Coinbase in Dane County court, alleging their prediction market offerings constitute illegal gambling operations that must cease serving state residents.

The complaints seek declarations that offering sports-related event contracts to Wisconsin customers violates Wis. Stat. § 945.03(1m) and constitutes a public nuisance, according to court documents.

Wisconsin cited the platforms' own marketing as evidence, including Kalshi Instagram ads that billed it as "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 filings state.

The state alleges Kalshi generates more than $1 billion annually from sports contracts—roughly 90% of its estimated total revenue.

Wisconsin's enforcement action mirrors a lawsuit filed Tuesday by New York Attorney General Letitia James against Coinbase and Gemini over similar prediction market offerings.

"Gemini and Coinbase’s so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails," James said in a statement, adding, “My office is taking action to protect New Yorkers and stop these platforms from violating the law.”

Pressure on prediction markets

The state actions signal growing pressure on prediction markets from multiple jurisdictions simultaneously, amid an intensifying regulatory battle over who controls prediction markets.

The Department of Justice and the Commodity Futures Trading Commission, which claims exclusive federal authority, have sued Connecticut, Arizona, and Illinois for attempting to regulate platforms like Kalshi and Polymarket.

CFTC Chairman Michael Selig has argued the agency must safeguard its regulatory authority, stating that Congress rejected the kind of fragmented state-by-state approach now emerging. The federal-state conflict leaves prediction market operators navigating contradictory regulatory demands, with Selig warning that failing to establish clear guidelines could drive operators offshore and increase the risk of FTX-style “implosions.”

Wisconsin's lawsuit adds to mounting regulatory challenges for prediction markets nationwide, with two senators introducing a bipartisan legislative effort last month seeking to ban sports prediction markets entirely.

New York and Illinois have prohibited government employees from trading on the platforms over insider information concerns, while a U.S. Army soldier was charged yesterday with using classified information to trade on Polymarket around the January operation to remove Venezuelan President Nicolás Maduro.