Overview
- Wisconsin Attorney General Josh Kaul filed three Dane County lawsuits on Thursday targeting Crypto.com, Polymarket, and a Kalshi distribution chain that includes Robinhood and Coinbase, seeking to block sports event contracts for state residents.
- The state says these yes-or-no “event contracts” pay $1 if a sports outcome occurs and $0 if it does not, which matches the legal definition of a wager, citing NCAA tournament markets and platform fees that function like a sportsbook’s cut.
- Prosecutors quote the companies’ own marketing to support the gambling claim, including Kalshi ads calling it “The First Nationwide Legal Sports Betting Platform,” and they allege Kalshi derives about $1 billion a year from sports contracts, roughly 90% of its estimated revenue.
- Kalshi, Robinhood and Coinbase say the contracts are swaps governed by the U.S. Commodity Futures Trading Commission and pledge to defend the cases, pointing to a recent Third Circuit ruling that strengthened federal preemption arguments.
- The clash is expanding as the CFTC sued New York on Friday after that state moved against prediction markets, signaling a broader fight that could curb access for Wisconsin users even as a new state law permits online betting only through servers on tribal land.