According to Attorney General Josh Kaul (D), five prediction market operators are being sued by the Wisconsin Department of Justice (DOJ) for reportedly providing customers with an unlawful kind of sports betting.
The Wisconsin Department of Justice is targeting Coinbase Global, Crypto.com, Kalshi, Robinhood Markets, and Polymarket, a business that doesn't even operate in the US.

The state's Justice Department asked for a declaration today in complaints filed in Dane County that prediction market operators are "generating a public nuisance" by making sports event contracts accessible to customers in the Badger State.

"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 allegations regarding the prediction market companies indicate that by charging fees to local residents who engage in buying and selling event contracts, the operators are breaching the gambling regulations set forth by the state.

Interesting Timing for Wisconsin Prediction Markets Suit

It might be coincidental, but Kaul’s lawsuits concerning yes/no markets emerged roughly two weeks following the signing of a bill by Wisconsin Governor Tony Evers (D) that permits the 11 federally recognized tribal nations in the state to provide online sports wagering.

In 2023, Kaul was provided with a campaign donation of $3,500 from the Forest County Potawatomi, an entity that runs a tribal casino in Wisconsin, as reported by data from OpenSecrets.org.

States that possess substantial tribal gaming interests, along with national associations representing tribal casino operators, are among the most outspoken opponents of prediction markets. They contend that the firms responsible for these platforms disregard state gaming laws and endanger tribal sovereignty.

What might benefit Wisconsin tribes with regards to sports betting is evidence indicating that when given options, the majority of retail bettors tend to favor sports betting applications over prediction markets.

Nonetheless, this preference specifically relates to well-known entities like DraftKings and FanDuel.

Some analysts in the industry suggest that the structure of the legislation enacted by Evers may not appeal to commercial operators, as it mandates a minimum 60/40 split of revenue between the tribes and outside businesses.

This situation could confine the state's online sports betting sector to applications operated by tribes, while excluding the most recognizable brand operators from participation.

Wisconsin Seeking Familiar Legal Remedies

Wisconsin is following a well-trodden legal route in its lawsuits against the prediction market operators. Similar to many other states taking legal steps against these companies, Wisconsin is seeking both temporary 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.