Wisconsin joins prediction market fight, suing Kalshi, Coinbase, Polymarket, Robinhood and Crypto.com
The state’s complaint highlights language used by prediction market platforms as language for gambling, not investing.
What to know:
- Wisconsin has sued Kalshi, Coinbase, Polymarket, Robinhood and Crypto.com, arguing their prediction markets function as unlicensed gambling operations rather than financial platforms.
- The state’s complaints say “event contracts” are wagers under Wisconsin law, citing sports-related markets, fee structures and the companies’ own marketing that describes the services as betting.
- The cases deepen a growing clash between states and the CFTC over whether prediction markets are federally regulated financial instruments or state-regulated gambling, a dispute likely to reach the Supreme Court.
“Thinly disguising unlawful conduct doesn’t make it lawful,” Attorney General Josh Kaul said in a press release announcing the complaints on Thursday.
The question underneath the lawsuits is straightforward: are these contracts financial instruments under the Commodity Futures Trading Commission (CFTC), or bets under state gambling law? The answer determines whether a fast-growing market operates under a single federal rulebook or is carved up across 50 states under the jurisdiction of local gaming regulators. And it’s almost certainly headed to the Supreme Court.
Wisconsin’s complaints, filed in Dane County, target three parallel ecosystems.
One names Crypto.com and its derivatives arm. Another goes after Polymarket and affiliated entities. A third pulls in Kalshi alongside distribution partners Robinhood and Coinbase (both Robinhood and Coinbase route prediction market orders to Kalshi), arguing the platforms together facilitate sports betting for state residents.
