U.S state Wisconsin filed a lawsuit against the five major platforms, including Coinbase, Polymarket, Kalshi, Robinhood, and Crypto.com, claiming their prediction markets violate state gambling laws. The case argues these “event contracts” are actually sports bets.
This adds pressure on the industry and raises a simple question: are these platforms real trading tools, or just gambling in disguise?
Wisconsin Targets Prediction Platforms Over “Event Contracts”
According to the complaint filed by the state, these platforms are offering products that closely resemble sports betting, which is illegal in Wisconsin outside tribal casinos.
Wisconsin Attorney General Josh Kaul accused platforms like Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com of violating state gambling laws
He said that labeling these products as “event contracts” does not change what they actually are. According to him, these platforms are still facilitating illegal sports betting.
“The state says it wants to halt their alleged facilitation of illegal sports betting, a form of unlawful commercial gambling, in Wisconsin.”
Kaul also made it clear that no company is above the law. He argued that firms are simply using financial language to hide gambling activity. The state is now asking the court to stop these platforms from offering such services to users in Wisconsin.
Why Wisconsin Says This Is Gambling?
Prediction platforms claim users are trading financial contracts based on real-world outcomes. But Wisconsin disagrees.
The lawsuit shows that:
- Users are effectively betting on outcomes like sports events
- Platforms charge fees similar to betting systems
- Marketing often promotes activities like gambling
Because of this, the state argues these contracts should be treated as traditional bets under local law.
Therefore, the lawsuit has been filed in Dane County, asking the court to declare these platforms illegal in Wisconsin. It also seeks to block them from offering sports-related contracts to users in the state.
Companies Push Back With Federal Argument
The companies strongly deny the allegations. They say users are not gambling but trading on outcomes, similar to financial markets. Platforms like Robinhood and Kalshi argue that their services are regulated at the federal level by the Commodity Futures Trading Commission (CFTC).
Kalshi, in particular, claims its contracts are legal financial instruments traded on a regulated exchange, not gambling products.
This creates a direct conflict between state and federal views.
Growing Nationwide Pressure on Prediction Markets
This is not the first time prediction markets have faced legal trouble. Other states like Nevada and New York have already raised similar concerns, calling these contracts no different from gambling.
If Wisconsin wins, it may force platforms to change or limit their services in multiple states.
But if companies win, prediction markets could expand more freely across the U.S.
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