‘No company is above this law’: Wisconsin attorney general suing prediction market companies 

MILWAUKEE (CBS 58) - On Thursday, April 23, Wisconsin Attorney General Josh Kaul announced a lawsuit against prediction market companies, including Kalshi, Robinhood, Coinbase and other affiliates.

“Sports betting and other forms of commercial gambling have long been illegal in the state of Wisconsin, no company is above this law,” Kaul said. “No matter how creatively those companies try to disguise the activity that they’re engaged in.”

The companies take money from users who are looking to predict a future event, put it into a pooling system, and take a fee.

Users that pick the right answer get money back from the pool, and the losers get nothing in return.

“The companies collect a fee, we allege, for every bet that’s made leading them to earn significant revenue from Wisconsinites through violations through our state’s gambling regulations,” Kaul said.

Jason Kido Lopez is an assistant professor in the Department of Communication Arts at the University of Wisconsin - Madison and is a sports betting expert.

“I’m not sure if I’d call it a loophole, but it’s just something that they kind of just stepped in and our legal systems whether that’s on the federal or state side are having trouble keeping up with it or wanting to regulate even in some cases,” Lopez said.

Lopez says the companies run similarly to other sports betting organizations like sportsbooks.

“For the user and how they make money is very reminiscent of gambling to the point where I would argue that it is,” Lopez said. “You’re risking money to gain some money and you’re doing it on uncertain events, if that’s not gambling, I’m not sure what it is.”

Kaul says that the lawsuit has nothing to do with the recent signing of an online sports betting bill by Governor Tony Evers.