Wisconsin DOJ Targets Kalshi and Polymarket in Sweeping Prediction Market Crackdown

Wisconsin filed three lawsuits against Kalshi, Robinhood, Coinbase, Polymarket, and Crypto.com. 

According to the announcement, authorities are moving to shut down the platforms’ alleged facilitation of sports betting activity that Wisconsin treats as illegal commercial gambling.

State Crackdown on Prediction Markets Widens

The Wisconsin DOJ filed its lawsuits in Dane County. They seek a declaration that offering sports-related event contracts to in-state customers violates Wis. Stat. § 945.03(1m) and constitutes a public nuisance. 

The authorities are also pursuing both preliminary and permanent injunctions to bar the named companies from making sports-related event contracts available for trading by customers located in Wisconsin. Attorney General Josh Kaul framed Wisconsin’s theory bluntly in Thursday’s announcement.

“Thinly disguising unlawful conduct doesn’t make it lawful. “These companies’ alleged facilitation of sports betting in Wisconsin should be shut down,” Kaul said.

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The press release noted that commercial gambling, including sports wagering, is prohibited in Wisconsin, with only narrow exceptions. The complaints also argue that the defendants have sidestepped that ban by rebranding sports bets as “event contracts,” which settle based on sporting outcomes, as traditional wagers do. 

“The complaints further allege that the companies collect a fee for every bet made, meaning they generate revenue from Wisconsinites by violating the state’s gambling laws. Kalshi, as one example, reportedly generates more than $1 billion in annual revenue from its sports contracts, representing around 90% of its total estimated annualized revenue,” the press release added.

Meanwhile, Wisconsin’s filings arrive two days after New York Attorney General Letitia James sued Coinbase and Gemini. James alleged that the platforms run illegal gambling operations “in New York through their so-called ‘prediction market’ platforms.” 

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

The actions reflect a wide enforcement push. Last month, Lawmakers Adam Schiff and John Curtis introduced a bill that would ban sports event contracts on prediction market platforms.

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