Wisconsin Just Legalized Sports Betting—And Now It’s Launching a Legal War on Prediction Markets

• Wisconsin Department of Justice is suing five prediction market operators
• The state claims those platforms offer illegal sports wagering
• The suit was unveiled just two weeks after the state approved a tribal sports betting bill

The Wisconsin Department of Justice (DOJ) has confirmed it’s suing five prediction market operators with Attorney General Josh Kaul (D) alleging those companies are offering customers an illegal form of sports betting.

Coinbase Global, Crypto.com, Kalshi, Polymarket — a company that isn’t even operational in the US — and Robinhood Markets comprise the quintet in the crosshairs of the Wisconsin DOJ.

In suits filed earlier today in Dane County, the state’s Justice Department requested a declaration that by making sports event contracts available to consumers in the Badger State, prediction market operators are “creating a public nuisance.”

Thinly disguising unlawful conduct doesn’t make it lawful,” said Kaul in a statement. “These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.”

The state’s complaints against the prediction market companies also state by collecting fees from residents of the state that buy and sell event contracts, the operators are violating the state’s gambling laws.

Interesting Timing for Wisconsin Prediction Markets Suit

Perhaps it’s coincidence, but Kaul’s suits against yes/no exchanges arrives about two weeks after Wisconsin Gov. Tony Evers (D) signed a bill allowing the state’s 11 tribal nations with federal recognition to offer online sports betting.

What could work in favor of Wisconsin tribes with sports betting exposure are data suggesting when given a choice, most retail bettors prefer sports betting apps over prediction markets.

However, that sentiment pertains to the big-name operators, such as DraftKings and FanDuel.

Some industry observers believe the makeup of the law signed by Evers isn’t attractive to commercial operators because it would require a minimum 60/40 revenue split between tribes and outside companies.

That could limit the state’s online sports betting industry to tribe-run apps while keeping the operators with the most brand recognition out.

Wisconsin Seeking Familiar Legal Remedies

Wisconsin is traversing a familiar legal path in its cases against the prediction market operators. As nearly all the other states that are pursuing legal action against these companies have done, Wisconsin wants preliminary and permanent injunctive relief.

“The lawsuits additionally request preliminary and permanent injunctions enjoining and restraining the defendant companies from making sports-related event contracts available for trading by customers located in Wisconsin,” according to a statement issued by Kaul’s office.