Wisconsin AG Sues Kalshi, Polymarket, Robinhood, Crypto.com and Coinbase
Wisconsin Attorney General Josh Kaul filed suit in state court seeking permanent injunctions against all five major US prediction market platforms, arguing event contracts constitute unlicensed gambling under state law regardless of federal CFTC licensing.
Wisconsin Attorney General Josh Kaul filed suit in state court against Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase in late April 2026, seeking preliminary and permanent injunctions barring the platforms from operating in Wisconsin. The filing is the broadest state-level legal challenge to prediction market operators in the industry's history, targeting every major US-accessible platform in a single action.
Kaul's complaint frames event contracts as unlicensed gambling under Wisconsin law, regardless of the federal CFTC Designated Contract Market licences held by some defendants. "Thinly disguising unlawful conduct doesn't make it lawful," Kaul said at the announcement. The theory forces a collision with federal pre-emption doctrine: Kalshi and Robinhood both hold DCM licences and have argued that federal CFTC oversight supersedes state gaming statutes. Courts have not resolved this pre-emption question definitively, and the Wisconsin case is expected to become a key test of whether state gaming authorities can override a federal commodity exchange licence.
For Wisconsin residents, even a preliminary injunction would block access to all five named platforms while litigation proceeds. The stakes are significant given Kalshi's current availability in 35+ US states and Robinhood's 26-million-strong user base. Kaul's office did not specify remedies for existing Wisconsin account holders. Legal observers noted that New Jersey has already maintained a de facto exclusion of CFTC-licensed event contract platforms through its own regulatory posture, suggesting Wisconsin is following a precedent rather than acting in isolation.
At least three other state attorneys general have signalled interest in similar suits following Wisconsin's filing. The action coincides with a 24% reduction in CFTC staffing since January 2025, a capacity cut critics say has created a regulatory vacuum that states are beginning to fill. If Wisconsin prevails on the pre-emption question, federal DCM licences would lose much of their value as a shield against state gaming laws, potentially dismantling the geographic access model under which US prediction market platforms currently operate.
Operators mentioned in this article
CFTC-regulated Kalshi
First fully CFTC-regulated US event-contract exchange.
Crypto / On-chain Polymarket
USDC-settled on Polygon. Largest prediction market by volume.
Broker (Embedded Contracts) Robinhood
Consumer brokerage offering embedded event contracts. Fastest-growing retail prediction market platform in the US.
Recent updates
Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanor, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing of suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinizing oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures attempting to trade 'oftentimes after the fact.' The remarks highlight the CFTC's dual and somewhat conflicting role as both the platforms' federal protector and their manipulation watchdog, at a time when the agency has shed enforcement staff.