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
IG Group Buys Underdog for $1.3 Billion — The First Major Foreign Acquisition of a US Prediction Market Exchange
IG Group, the UK-listed financial trading platform, has agreed to acquire Underdog for approximately $1.3 billion — 13 days after Underdog launched its own CFTC-licensed exchange. The deal gives IG Group a US designated contract market and derivatives clearing organization, making it the first international financial firm to acquire a licensed US prediction market venue. Underdog is currently the third-largest US prediction market by regulated notional volume, behind Kalshi and Robinhood.
An Independent Integrity Body Found 7 Betting Irregularities at the World Cup. FIFA Said There Were None. The Clash Centers on Polymarket.
The Group of Copenhagen — the Council of Europe's independent match manipulation watchdog — raised seven yellow notices for potential betting irregularities during the 2026 World Cup, in direct contradiction to FIFA's own Integrity Task Force, which published an all-clear on Tuesday. The most troubling finding involves Polymarket: the platform opened a market on July 2 asking whether Folarin Balogun would play against Belgium — the same day Balogun received a red card and three days before FIFA publicly confirmed his ban was suspended. No equivalent markets were opened for any of the other 14 red cards shown at the tournament.
After Yesterday's Hearing, Congress Looks Ready to Legislate on Prediction Markets — Not Just Watch
The House Agriculture Subcommittee held a two-hour hearing on July 22 examining sports event contracts, with witnesses from the American Gaming Association, tribal gaming, and both sides of the CFTC authority debate. Subcommittee Chair Dusty Johnson said Congress 'cannot afford to be silent' and signaled there is 'work for them to do.' Witnesses urged members to advance H.R. 7840, the Event Contract Enforcement Act, which would ban sports event contracts outright. The hearing adds a third front to a fight that is already being waged simultaneously in ten state courts and at the CFTC.