Wisconsin Sues Kalshi, Coinbase, Polymarket, Robinhood and Crypto.com

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Wisconsin Attorney General Josh Kaul has sued Kalshi, Coinbase, Polymarket, Robinhood and Crypto.com, accusing them of running or facilitating illegal sports betting through so-called event contracts.

The lawsuits were filed in Dane County and seek to stop the platforms from offering those contracts to customers in Wisconsin. The Wisconsin Department of Justice (DOJ) also asked the court to declare the alleged conduct a public nuisance.

State Says Event Contracts Mirror Sports Bets

Wisconsin Attorney General Josh Kaul said the companies are trying to present sports betting as financial-market activity. The complaints argue that users put money on sports outcomes and receive payouts based on whether those outcomes happen.

The state says the platforms collect fees on the trades and generate revenue from Wisconsin customers in violation of state gambling laws. Kaul said the conduct should be stopped, arguing that changing the label on the product does not make it legal.

The lawsuits seek preliminary and permanent injunctions that would block the companies from making sports-related event contracts available for trading in Wisconsin. The DOJ filed separate complaints against Kalshi, Robinhood, Coinbase, Polymarket, and Crypto.com.

Wisconsin Joins a Wider Legal Fight

The case adds Wisconsin to a growing legal fight over whether sports event contracts are gambling under state law or fall under the Commodity Futures Trading Commission (CFTC)-supervised federal commodities oversight. State gambling regulators have argued that sports event contracts fall under local betting laws, while prediction market operators have generally pointed to federal commodities oversight.

Courthouse News reported that Kalshi’s contracts are regulated under the Commodity Exchange Act, which bars certain event contracts tied to areas such as terrorism, assassination, war and gaming, while leaving room for contracts with a commercial purpose or those not used only for gambling.

That legal line is now being tested across several states. Courthouse News reported that the Third Circuit this month blocked New Jersey regulators from stopping Kalshi’s sports-related event contracts, while a Ninth Circuit panel is weighing related questions around sports betting, casino gambling and regulatory control.

New Tribal Betting Law Frames the Dispute

The Wisconsin action comes shortly after Gov. Tony Evers signed a law allowing online sports betting through tribal compacts, with servers or devices located on tribal land. Kaul’s office argues that the new framework does not allow prediction market platforms to offer sports contracts across the state.

Under that law, digital wagers must be tied to tribal gaming compacts and use servers or devices located on tribal land. The state says the defendants’ products fall outside those limits.

The Ho-Chunk Nation is also pursuing a separate federal case against Kalshi and Robinhood in Wisconsin. The tribe has argued that yes-or-no sports outcome markets amount to illegal sports gambling on Indian lands.