TechFlow News: On April 24, Wisconsin Attorney General Josh Kaul filed a lawsuit against Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com, alleging that these platforms operate unlicensed gambling businesses under the guise of “event contracts,” according to a CoinDesk report. The complaint cites marketing language used by the platforms themselves—for instance, Kalshi’s claim to be “the first legal sports betting platform in the U.S.” and Polymarket’s statement that users can “bet on the outcomes of future events”—to argue that such contracts constitute wagering under Wisconsin law.
The state government further contends that the platforms’ fee-based transaction model is functionally equivalent to casino rake. The central legal dispute centers on whether prediction market contracts fall under federal regulation by the Commodity Futures Trading Commission (CFTC) or are subject to individual states’ gambling laws. Multiple states have already filed similar lawsuits, and this issue is expected to ultimately be decided by the U.S. Supreme Court.
