The US state of Wisconsin has sued five major platforms, including Coinbase, Polymarket, Kalshi, Robinhood, and Crypto.com, alleging that their prediction markets violate state gambling laws. The lawsuit alleges these “event contracts” are sports betting.
This increases the pressure on companies and raises a simple question: are these platforms real trading tools, or just gambling in disguise?
Wisconsin Pursues Prediction Platforms For “Contracts That Happen”
According to a complaint has been filed by state, these platforms are offering features that closely resemble sports betting, which is illegal in Wisconsin outside of state-owned casinos.
Wisconsin Attorney General Josh Kaul has accused platforms like Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com of violating state gambling laws.
He added that labeling these products as “event contracts” does not change their content. According to him, these platforms are still supporting illegal sports betting.
“The state says it wants to end its promotion of illegal betting, a form of illegal gambling, in Wisconsin.”
Kaul also made it clear that no company is above the law. He also said that companies are only using economic terms to hide gambling. The state is now asking the court to stop these platforms from providing such services to users in Wisconsin.
Why Does Wisconsin Say This Is Gambling?
Prediction platforms claim that users are trading financial contracts based on actual results. But Wisconsin disagrees.
The law states that:
- Users are betting successfully on results such as sports events
- The platforms charge a fee similar to the betting process
- Advertising often promotes things like gambling
Because of this, the government says that 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 that these platforms are illegal in Wisconsin. It also wants to prevent them from awarding gaming-related contracts to government users.
Companies Push Back With Federal Argument
The companies strongly dispute the charges. They say that users do not gamble but trade on results, similar to financial markets. Platforms such as Robinhood and Kalshi argue that their services are regulated by the Commodity Futures Trading Commission (CFTC).
Kalshiin particular, they say its contracts are legal instruments traded on legal exchanges, not gambling.
This creates a direct conflict between state and federal thinking.
Global Growth in Prediction Markets
This is not the first time that prediction markets have faced legal challenges. Some countries like Nevada and New York have already raised similar concerns, calling the deals tantamount to gambling.
If Wisconsin wins, it could force platforms to change or reduce their operations in several states.
But if the industry succeeds, the forecast markets can grow freely in the US
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