Wisconsin Joins Regulatory Battle Over Prediction Markets, Sues Kalshi, Polymarket and Others

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On April 24, prediction market platforms have consistently maintained that their products are financial instruments, not gambling. However, Wisconsin does not agree with this assertion. In a recent lawsuit against Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com, the state cites the companies’ own marketing materials, labeling them as unlicensed gambling establishments. “Weak disguises to cover illegal activities do not make them legal,” said State Attorney General Josh Kaul in a statement released on Thursday. The core issue behind these lawsuits is quite simple: are these contracts regulated financial instruments under the Commodity Futures Trading Commission (CFTC) or are they gambling activities governed by state gambling laws? The answer will determine whether this rapidly growing market is regulated by unified federal rules or divided among the 50 states, managed by various local gambling regulators. This dispute is almost certain to be ultimately submitted for a ruling by the Supreme Court.

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