Wisconsin Attorney General Cracks Down on Illegal Betting Operations Disguised as Lawful Gambling

Wisconsin’s Attorney General has filed lawsuits against several prediction market platforms, alleging they facilitate illegal sports betting in the state by disguising such activity as “event contracts.” The legal action targets companies including Kalshi, Robinhood, Coinbase, Polymarket, and Crypto.com, which the state claims generate revenue from Wisconsin residents through these arrangements.

According to Attorney General Josh Kaul, the companies collect fees for every bet made, effectively profiting from what the state considers unlawful gambling activity. The lawsuits argue that by offering contracts tied to sports-related outcomes, these platforms are engaging in conduct indistinguishable from traditional sports betting, which remains illegal in Wisconsin except for limited tribal operations.

The filings, submitted in Dane County, request court declarations that the platforms violate Wisconsin Statute § 945.03(1m) and create a public nuisance. The state seeks both preliminary and permanent injunctions to prevent the companies from offering sports-related event contracts to users located in Wisconsin.

Kaul stated that “thinly disguising unlawful conduct doesn’t make it lawful,” emphasizing that the state views the use of “event contracts” as a deliberate attempt to circumvent existing gambling prohibitions. The complaints specifically note that Kalshi alone generates over $1 billion annually from its sports-related contracts, representing approximately 90% of its total estimated revenue.

The lawsuits follow recent legislation signed by Governor Tony Evers that legalized online sports betting in Wisconsin, but only when operated through Native American tribes. The Attorney General’s office maintains that this tribal-authorized framework does not extend to prediction market websites, which it argues are operating outside the state’s legal gambling structure.

Court documents describe the mechanisms in question as agreements traded between buyers and sellers at set prices, designed to mirror the odds of specific sports outcomes. Participants wager money on whether events will occur, a process the state says replicates traditional sportsbook betting despite the different terminology used by the platforms.

The legal challenge reflects broader tensions between emerging financial technologies and state gambling regulations, particularly as digital platforms innovate around established definitions of wagering activity. Wisconsin’s position is that substance, not labeling, determines legality under its statutes.