Wisconsin Legislator Takes Legal Aim at Prediction Market Operators

Wisconsin Attorney General Josh Kaul filed three separate lawsuits in Dane County Circuit Court on April 24, taking direct aim at some of the biggest names in the prediction market industry.

Kalshi, Robinhood, Coinbase, Polymarket, and Crypto.com, were all targeted over what the state says amounts to unlicensed sports gambling dressed up in financial clothing.

The complaints center on event contracts, which allow users to stake money on real-world outcomes with payouts determined by whether the event occurs. Under Wisconsin law, Kaul argues, that structure is no different from placing a sports wager at a casino.

Each contract typically resolves at $1 if the condition is met and $0 if it is not, and the platforms collect a transaction fee on every trade. The filings compare this model to a casino taking a cut of every pot at the poker table.

Kaul filed the suits in three clusters. One targets Crypto.com and its derivatives arm. A second names Polymarket and affiliated entities. A third pulls in Kalshi alongside Robinhood and Coinbase, which route customer orders through Kalshi's platform.

The companies named in the suits pushed back firmly. Robinhood and Kalshi both contended their products fall under the exclusive regulatory authority of the Commodity Futures Trading Commission (CFTC), not state gambling regulators.

Kalshi's legal standing received a partial boost earlier in the month when a federal circuit court sided with the company on related jurisdictional grounds.

Wisconsin joins a list of states that are taking a stance against prediction market apps. The litigation arrived weeks after Gov. Tony Evers signed a law permitting online sports betting in Wisconsin, though only through tribal-operated servers. Kaul said this distinction had no bearing on his decision to sue.

Minnesota opts for legislative prohibition

Across the border, Minnesota has moved simultaneously to cut off prediction markets through a different channel. It is seeking outright prohibition.

A Minnesota Senate committee advanced a bill on April 24 that would explicitly classify bets on elections, court rulings, weather events, and cultural outcomes as illegal under state law. The proposal, sponsored by Sen. John Marty of Roseville, cleared the committee and was positioned for a full Senate floor vote.

Its timing was colored by a controversy involving one of its own co-authors: Sen. Matt Klein, who is running in a Democratic congressional primary, was found to have placed a $50 wager on his own race through Kalshi. Klein reached a settlement with the company that included a fine and a five-year suspension from the platform. He acknowledged the bet was a mistake and said his experience reinforced the case for clearer regulation.

A companion bill existed in the Minnesota House, but Republican leadership there expressed reservations, pointing specifically to the unresolved tension with federal commodity law. The CFTC had already sued Connecticut, Arizona, and Illinois in early April, asserting federal primacy over prediction market regulation.