Wisconsin sues Kalshi, Polymarket, Coinbase and Crypto.com

The Wisconsin Department of Justice filed three complaints on Thursday in Dane County against Kalshi, Robinhood, Coinbase, Polymarket and Crypto.com and related affiliates. The suits allege the companies’ sports-related event contracts amount to illegal wagers and ask a court to block those contracts from being offered to Wisconsin residents.

One complaint names Kalshi, Robinhood and Coinbase; a second targets Polymarket; a third names Crypto.com and its affiliates. The filings describe outcome-based contracts that the state says operate like traditional sports bets and say the companies collect fees on each transaction.

The complaints include market examples that let users wager on which team will win a Final Four matchup, which team will cover a point spread and which team or player will reach a specified number of points first. In the filing against Crypto.com the state states the exchange charges $0.02 per $1 contract and $0.10 per $10 contract, plus technology fees on some trades.

The DOJ alleges violations of Wisconsin’s commercial gambling statute, including receiving or forwarding bets for gain, acting as custodian of wagered funds for gain and using wire communication facilities to facilitate betting for gain. The state seeks declaratory judgments that the contracts violate the law and both preliminary and permanent injunctions to bar the defendants from offering the contracts to customers located in Wisconsin.

The complaints say Wisconsin is not asking courts to void existing contracts involving Wisconsin customers; the relief sought is prospective only.

Attorney General Josh Kaul wrote in a statement accompanying the filings, “Thinly disguising unlawful conduct doesn't make it lawful.”

The Wisconsin action follows enforcement moves in other states. On Tuesday the New York attorney general sued platforms including Coinbase, alleging prediction markets operate as illegal gambling and noting some platforms allowed users aged 18 to 21 to participate. New York’s complaint seeks at least $2.2 billion from Coinbase and $1.2 billion from Gemini. New York and Illinois governors issued orders restricting state employees from using nonpublic information obtained on the job to bet on prediction markets.

Tennessee and Arizona have sued to stop Kalshi from offering certain markets, and Arizona, Connecticut and Illinois have issued cease-and-desist orders to operators. On April 3 the Commodity Futures Trading Commission sued Connecticut, Arizona and Illinois, arguing the agency has exclusive authority to oversee these markets.

CFTC Chairman Rostin Behnam said the agency will safeguard its regulatory role and that Congress intended to prevent a patchwork of state rules.

Court rulings will determine whether state gambling statutes apply to prediction and event markets and how federal and state regulators divide oversight.