Wisconsin’s newly formed sports betting and event scheme for Native American tribes does not license prediction market websites to run sports betting schemes in the state, its attorney general says.
MILWAUKEE (CN) – Wisconsin Attorney General Josh Kaul filed a lawsuit Thursday alleging that several online betting market websites have conducted illegal sports betting operations in the state.
“The thin veneer of illegal behavior does not make it legal,” Kaul said in a statement. “The purported facilitation of these Wisconsin sports betting companies must be shut down.”
The state is asking a judge to order Kalshi, Robinhood, Coinbase, Polymarket, Crypto.com and their affiliates to stop any facilitation of illegal sports betting in the Dairy State.
Through their prediction markets, the indicted platforms offer “event contracts,” or contracts traded between buyers and sellers at agreed-upon prices that mimic the odds of sports-related outcomes, the state says.
“Kalshi, Robinhood and Coinbase use a fig leaf to disguise the casino-style sports betting they facilitate in Wisconsin,” Kaul says in the 38-page complaint. Parties to these ‘event contracts’ bet on whether a certain sports-related outcome will occur, just as people bet on the same outcome using traditional casino-style sportsbooks.
Earlier this month, Governor Tony Evers signed a law to legalize online events and sports betting run by Native American tribes. But Kaul contends that event contracts and sports gambling are indistinguishable and illegal in Wisconsin.
The law requires that the server or equipment used to conduct betting be built on tribal land and align with tribal gaming compacts by adding an exception to the statutory definition of “betting” to allow digital bets made within Wisconsin’s physical boundaries.
Tribal nations can now take steps toward negotiating with each other, the state, and the betting platforms to create a plan that equally benefits all 11 federally recognized tribes.
Repeatedly violating Wisconsin sports betting regulations, Kaul alleges that the defendant’s platforms are a public nuisance.
The Ho-Chunk Nation is also included in one similar suit v. Kalshi and Robinhood filed Aug. 2025 in the Western District of Wisconsin.
The tribe alleges that online marketplaces are engaging in illegal sports betting on Indian lands by allowing users to pick “yes” or “no” on the results of sporting events.
Kalshi offers a prediction market, where it says users can buy and sell contracts on the outcome of events. These event contracts are governed by the Exchange of Goods Act, which prohibits any contract related to terrorism, assassination, war and gaming.
However, it has a loophole for event contracts that serve a commercial purpose or those that are not used solely for gambling. Kalshi claims that the site is not about gambling, but is an online platform where users “trade on the outcome of real world events”.
The court has not indicated when it will decide on Kalshi’s request for dismissal or the tribe’s request for a preliminary measure in that case.
Thursday’s lawsuit adds to similar cases across the country as states grapple with new betting limits.
Third district this month states blocked from regulation Kalshi’s prediction markets, handing over exclusive regulation of the industry to a single federal agency. A Ninth Circuit panel is considering the difference between sports betting and casino gambling, and who should control it.
The defendants in the Wisconsin lawsuit collect a fee for each bet placed and making money in violation of Wisconsin law, according to Kaul. He compared the fee to operators of illegal poker games taking a share of every pot.
Kaul said Kalshi earns about $1.3 billion annually on its prediction market, at least 90% of its annual revenue. While he did not rule out the possibility of monetary damages, he said that is not the issue.
“The primary focus is to shut down what we allege is illegal sports betting activity facilitated by these defendants,” Kaul said. “If we think there is an appropriate legal basis to seek relief, we are not ruling it out, but right now our focus is on shutting down the (illegal) activity.”
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