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
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Kalshi disclosed on August 31 that it suspended North Carolina congressional candidate Laurie Buckhout for three years and fined her $2,589 for trading on her own race — the first publicly known enforcement action against a candidate for prediction market insider trading. Kalshi said it found multiple politicians trading on races they were involved in, including former Congressman George Santos. The Senate had unanimously banned its members and staffers from prediction market trading on April 30. CNN published a major feature on September 24 documenting election officials' concerns about disinformation and insider trading risk from prediction markets as the midterms approach.
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A Pew Research Center analysis published September 23 found that combined monthly trading volume on Kalshi and Polymarket more than doubled from May to July 2026 — rising from $26 billion in May to $53 billion in July — driven primarily by sports contracts. Sports is now the largest trading category on both platforms. During the FIFA World Cup in June and July, Kalshi's monthly sports volume reached $58 billion. Over the same period, Americans wagered roughly $40 billion at licensed sportsbooks — suggesting prediction market sports volume has approached or exceeded licensed sports betting in dollar terms.
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