TLDR
- Wisconsin has sued five major crypto and trading platforms, calling their prediction markets unlicensed gambling
- The state filed three separate complaints targeting Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com
- The lawsuits argue “event contracts” are wagers under Wisconsin law, not financial instruments
- Platforms are accused of operating without a gambling license, with fees compared to casino rake
- The dispute could ultimately be decided by the U.S. Supreme Court
Wisconsin Attorney General Josh Kaul filed complaints on Thursday against five major financial and crypto platforms, accusing them of running unlicensed gambling operations in the state.
Wisconsin Sues Five Major Prediction Market Platforms
On April 24, Wisconsin sued Kalshi, Coinbase, Polymarket, Robinhood, and Cryptocom, alleging their prediction markets operate as unlicensed gambling rather than financial platforms; the complaints argue that “event contracts”… pic.twitter.com/kytu5klXRW
— Wu Blockchain (@WuBlockchain) April 24, 2026
The companies named are Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com. Wisconsin filed three separate complaints in Dane County, each targeting a different part of the prediction market ecosystem.
The first complaint names Crypto.com and its derivatives arm. The second targets Polymarket and affiliated entities. The third names Kalshi, along with Robinhood and Coinbase, which both route prediction market orders through Kalshi.
Wisconsin’s core argument is simple. The state says these platforms let users pay money to take a position on a real-world outcome, and collect a fixed payout if they are right. Under Wisconsin law, that is a bet.
“Thinly disguising unlawful conduct doesn’t make it lawful,” Attorney General Kaul said in a press release.
The complaints point to specific examples. One involves contracts tied to NCAA tournament games, where a winning position paid out $1 and a losing one returned nothing.
Prosecutors also quoted the platforms’ own marketing. Kalshi’s Instagram ads described the platform as “The First Nationwide Legal Sports Betting Platform.” Polymarket called itself “a platform where people can bet on the outcome of future events.”
The state also argued that charging transaction fees on each contract is similar to a casino taking a cut of every wager placed on its floor.
The Federal vs. State Battle
The platforms defend themselves by pointing to federal oversight. Kalshi has argued its contracts are swaps listed on a regulated exchange, placing them under the exclusive jurisdiction of the Commodity Futures Trading Commission.
Earlier this month, the Third Circuit sided with Kalshi, treating the CFTC’s decision not to block the contracts as effectively settling the jurisdictional question in Kalshi’s favor.
But state courts have taken a different view. Nevada described the contracts as “indistinguishable” from gambling. New York Attorney General Letitia James stated that “each contract is a bet.”
A Growing List of State Challenges
Wisconsin is not acting alone. Multiple states have now filed challenges against prediction market platforms, each building a legal record around the same core question.
The central issue is whether calling a product a financial instrument is enough to remove it from state gambling laws.
That question has no clear answer yet. Legal experts say the dispute between state gambling regulators and the CFTC is likely to eventually reach the U.S. Supreme Court.
For now, the five companies named in Wisconsin’s complaints face active legal proceedings in the state, with the broader regulatory future of the prediction market industry still unresolved.
