BroadChain learned that on April 24 at 13:22, Wisconsin Attorney General Josh Kaul filed a lawsuit against Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com, accusing these platforms of operating unlicensed gambling businesses under the guise of "event contracts."
The complaint cites the platforms' own marketing language—such as Kalshi calling itself "America's first legal sports betting platform" and Polymarket claiming users can "bet on the outcome of future events"—arguing that such contracts meet the definition of gambling under state law. The state further points out that the platforms' fee-based transaction model is functionally equivalent to a casino rake.
The core legal dispute revolves around whether prediction market contracts should be regulated by the U.S. Commodity Futures Trading Commission (CFTC) under federal law or fall under state gambling laws. Multiple states have filed similar lawsuits, and it is expected that the issue will ultimately be decided by the U.S. Supreme Court.