The Wisconsin Department of Justice (DOJ) has launched a significant legal offensive against the world’s leading prediction platforms.
The lawsuits, filed in Dane County, name Kalshi, Robinhood, and Polymarket as defendants, alleging that their “event contracts” are a thinly veiled form of illegal sports wagering.
“Disguised Unlawful Conduct”
Wisconsin Attorney General Josh Kaul was blunt in his assessment of the platforms’ operations. In a formal statement accompanying the filing, Kaul asserted:
“Thinly disguising unlawful conduct doesn’t make it lawful. These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.”
The Wisconsin Department of Justice’s complaints argue that these platforms function identically to traditional sportsbooks by paying out based on the odds of athletic outcomes. Furthermore, the state alleges that by collecting fees on every transaction, these companies are generating illicit revenue from Wisconsin residents. The lawsuits seek a declaration that these platforms constitute a “public nuisance” and request immediate injunctions to block their services within the state.
The Defense: Federal vs. State Jurisdiction
The defendants are preparing for a robust legal defense, arguing that their operations fall under federal oversight rather than state gaming laws.
A spokesperson for Kalshi defended the platform’s status:
“As other courts have recognised, Kalshi is a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction. It’s very different from what state-regulated sportsbooks and casinos offer their customers. We are confident in our legal arguments.”
Robinhood echoed this sentiment, noting that its contracts are regulated by the CFTC through its registered entity, Robinhood Derivatives, LLC. The outcome of this case could have profound implications for the legal standing of decentralized prediction markets across the entire United States.
