- Wisconsin is suing Kalshi, Polymarket, and other prediction markets for offering illegal sports betting in the state.
- The lawsuit alleges that Kalshi and other companies that make money from “illegal sports betting” are engaging in criminal gambling activity under Wisconsin Statutes.
- The state isn’t seeking for any financial relief, only that the platforms stop accepting wagers from Wisconsin players.
MADISON, Wisc. – Wisconsin is the latest state to add to a pile of lawsuits on Kalshi’s desk. Attorney General Joshua Kaul’s lawsuit against the prediction company also includes Robinhood and Coinbase, claiming that these prediction market apps facilitate illegal sports betting through trading sports events contracts on Kalshi’s prediction market platform.
The lawsuit aims to “restrain” Kalshi, Robinhood, and Coinbase from making their sports event contracts available for trading in Wisconsin, as well as a declaration that these platforms are violating Wisconsin Statute § 945.03 and “causing a public nuisance.” AG Kaul alleges that these companies are working together to offer illegal sports betting in the state, since their sports-related event contracts closely resemble what a sportsbook would offer.
Two other lawsuits against online prediction market companies name Polymarket and Crypto.com, as well as their affiliates. The message is the same across all three lawsuits; the transactions on these sites too closely resemble sports betting defined under Wisconsin state law.
“Robinhood and Coinbase also facilitate sports betting through the trading of sports-related event contracts on Kalshi’s prediction market,” the lawsuit reads. “Like Kalshi, Robinhood offers event contracts that mimic many traditional forms of sports bets.”
Do Lawsuits Relate To Wisconsin Sports Betting Legalization?
Wisconsin recently legalized online sports betting with servers located on tribal land, but does that have anything to do with these lawsuits against prediction market companies? AG Kaul says the allegations against prediction markets violating state law would be the same with or without their recent Wisconsin sports betting legalization.
The lawsuit against Kalshi and affiliated companies includes revenue estimates from transaction fees applied to their sports-related event contracts. This would hurt the revenue of incoming Wisconsin online sportsbooks.
It reads that “each company still generates significant revenue from these sports bets by charging transaction fees each time event contracts are traded using their platforms. For instance, according to a recent report in the Financial Times, Kalshi generates nearly 90% of all its fees from sports betting, amounting to estimated annualized revenue of around $1.3 billion. In short, Defendants make money from the illegal betting they facilitate, just like the operator of an illicit poker game who takes a cut of each pot.”
