Wisconsin Attorney General Josh Kaul filed complaints Thursday against Kalshi, Robinhood, Coinbase, Polymarket, and Crypto.com in Wisconsin state court, alleging each platform operates an illegal sports betting operation and creates a public nuisance under state law.
The complaints allege the defendants disguise sports wagers as “event contracts” while collecting fees on each transaction, constituting unlawful gambling. Wisconsin bars commercial sports betting except in limited circumstances. The lawsuits seek a declaration of public nuisance and preliminary and permanent injunctions blocking the platforms from offering sports-related event contracts to Wisconsin customers.
“Thinly disguising unlawful conduct doesn’t make it lawful,” Kaul said in the Department of Justice press release.
Each platform countered with federal preemption. Kalshi said it’s a regulated nationwide exchange subject to exclusive federal jurisdiction. Robinhood said its event contracts are regulated by the CFTC through Robinhood Derivatives LLC, a registered CFTC entity. Coinbase CLO Paul Grewal cited a Third Circuit ruling holding that state actions against prediction markets create a patchwork Congress displaced when it created the CFTC.
The jurisdictional clash isn’t new. On April 2, the CFTC itself sued Arizona, Connecticut, and Illinois, arguing all three states had intruded on federal jurisdiction over prediction markets. Wisconsin’s Thursday filing puts the state on the opposite side of that same federal regulator.
No hearing dates were disclosed in Thursday’s press release.
James Okafor