The Wisconsin Department of Justice (DOJ) has filed lawsuits against five major prediction‑market and trading platforms, accusing them of facilitating illegal sports betting in the state. Attorney General Josh Kaul named Kalshi, Coinbase, Robinhood, Polymarket, and Crypto.com and their affiliates in civil complaints filed in Dane County Circuit Court.
Prosecutors say these companies offered “sports‑related event contracts” that function just like traditional sports wagers for Wisconsin customers. The state argues that, despite being branded as event contracts or prediction markets, the products pay out based on game results and therefore qualify as unlawful commercial gambling under Wisconsin law.
How Prediction Markets Became the Focus
According to the complaints, users could buy and sell contracts tied to outcomes like who wins a specific game or whether a player hits a certain stat line. Each contract typically paid out 1 dollar if the event happened and 0 if it did not, a binary structure the state calls “indistinguishable from an ordinary sports bet.”
Officials say Kalshi offered these contracts directly, while Robinhood and Coinbase helped distribute some of them through their interfaces that connect to Kalshi’s markets.
Separate lawsuits target Polymarket and Crypto.com over similar sports‑linked markets on their platforms, even though Polymarket does not operate as a primary market for U.S. users and typically geoblocks American IP addresses.
Wisconsin’s Legal Argument and Requested Remedies
Wisconsin law bans most forms of commercial sports betting except in limited circumstances, such as tribal gaming compacts. The DOJ says the platforms tried to “thinly disguise” sports betting as investing by relabeling wagers as event contracts and prediction markets while still taking a cut of each trade.
The state is asking the court to declare that making sports‑related event contracts available to customers in Wisconsin violates the gambling statute and creates a public nuisance. It also seeks preliminary and permanent injunctions barring the companies from offering any sports‑linked event contracts to users in Wisconsin.
The platforms have long argued that event contracts can serve as financial hedging tools or information markets, not just betting products. Some industry voices say these cases blur the line between regulated derivatives, prediction markets, and gambling and could push innovative products out of certain states.
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