Wisconsin election officials said voters should not buy contracts on races they plan to vote in, warning prediction-market participation could violate a state election-betting ban.
An 1849 law bars anyone from voting in an election in which they have a direct or indirect bet or wager; violations can bring a $10,000 fine and up to 3½ years in prison.
Kalshi and Polymarket rejected that reading, saying prediction-market trades are not bets under federal law and arguing the warning threatens Wisconsin users' voting rights.
The commission said it does not plan proactive enforcement, but a voter who publicly boasts about a trade could face a challenge and be questioned under oath.
The dispute lands as Kalshi's Wisconsin Democratic gubernatorial primary market has topped $1.7 million, underscoring how fast election prediction markets are colliding with older state voting laws.
When does a financial prediction cross the line to become an illegal election bet?
Are prediction markets the future of forecasting or just unregulated digital casinos?
Who decides the future of online trading: federal regulators or individual state laws?
Wisconsin’s Legal Crackdown on Prediction Markets: State Lawsuits, Voter Risks, and the Federal Showdown Over $1 Billion in Bets
Overview
Wisconsin has taken strong action against prediction market platforms, with Attorney General Josh Kaul filing lawsuits against major companies like Kalshi, Coinbase, and Polymarket, arguing they are disguising illegal gambling as 'event contracts.' This mirrors similar moves in other states, such as Arizona. In response, the platforms claim they are financial marketplaces, not gambling sites, and push back against state interpretations. The conflict has drawn in the federal Commodity Futures Trading Commission, which asserts its authority over these markets, creating a complex legal battle between state and federal regulators over how prediction markets should be classified and controlled.