Wisconsin sues Kalshi, Polymarket, Robinhood and Coinbase

The Wisconsin Department of Justice filed three lawsuits in Dane County against Kalshi, Polymarket, Robinhood, Coinbase and Crypto.com. The filings ask a court to declare sports-related ‘event contracts’ illegal under Wis. Stat. § 945.03(1m) and to bar the platforms from offering those contracts to users located in Wisconsin.

The complaints seek preliminary and permanent injunctions and a judicial declaration that offering these contracts in the state constitutes a public nuisance. The state asks the court to order the companies to disable access for Wisconsin-based users and to stop offering or advertising sports-related event contracts to state residents.

Wisconsin’s filings say the companies present these products as ‘event contracts’ while settling them on the outcomes of sporting events and collecting fees on each trade. The complaints allege the platforms are operating as sports wagering services in violation of state law.

Attorney General Josh Kaul wrote in the Department of Justice announcement: “Thinly disguising unlawful conduct doesn’t make it lawful. These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.”

The DOJ release cites Kalshi as an example, saying the platform reportedly generates more than $1 billion in annual revenue from its sports contracts, representing about 90% of its estimated annualized revenue.

The Wisconsin suits follow recent enforcement actions elsewhere. Two days before Wisconsin filed its complaints, New York’s attorney general opened a case against Coinbase and Gemini, arguing their prediction markets operate as illegal gambling. New York Attorney General Letitia James wrote: “Gemini and Coinbase’s so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails.”

At the federal level, Representatives Adam Schiff and John Curtis introduced legislation that would ban sports event contracts on prediction market platforms.

Prediction markets and event contracts let traders buy and sell instruments that pay out based on whether a specified outcome occurs, including the result of a sporting event. Regulators in several states contend those products function like traditional sports bets when they settle on athletic outcomes and when platforms charge transaction or trading fees.

The cases will be heard in Dane County, where judges will decide whether the contracts violate Wisconsin gambling law and whether to issue the injunctions requested by the state.