Wisconsin’s prediction market feud could land in the Supreme Court
Wisconsin’s growing legal battle over sports betting and prediction markets could ultimately be decided by the US Supreme Court, according to legal experts and company representatives involved in the dispute.
The battle escalated after Wisconsin Attorney General Josh Kaul sued platforms including Coinbase, Kalshi, and Polymarket, accusing them of offering illegal sports betting in the state.
Wisconsin officials argue the companies are disguising sports wagers as event contracts, which allows them to operate outside state gaming regulations.
Ryan VanGrack, Vice President of Legal and Head of Litigation for Coinbase, told WISN12 that he believes it is not up to state regulators to make this decision.
“Ultimately, they’re suing based on a fundamental misunderstanding. They are presenting these issues as being whether these markets are regulated by a state regulator or no regulator, but that actually has it backward. These are already being regulated by a federal regulator,” he said.
VanGrack disagrees with Kaul’s comment that prediction market platforms are “flouting Wisconsin law.”
“He’s wrong because Congress already answered this question long ago when it assigned authority in this space to the Commodity Futures Trading Commission, a federal regulator,” he added. “And we continue to advance that point because we believe customers are best protected when you have clear and uniform rules regardless of where you live.”
In response to Wisconsin’s lawsuit, the Commodity Futures Trading Commission promptly filed its own lawsuit.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
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The Backstory
Why Wisconsin’s clash matters now
Wisconsin’s lawsuit against prediction market and crypto-linked trading platforms is not happening in a vacuum. It sits at the center of a broader recalibration of who regulates digital wagering and how. State attorneys led by Attorney General Josh Kaul argue certain event contracts are illegal sports bets under state law, while platforms counter their markets fall under federal commodities oversight. The stakes rose after the Commodity Futures Trading Commission filed its own action, a move that sharpened the federal-versus-state fault line. Local coverage has already signaled that the dispute could reach the nation’s highest court, with experts on Milwaukee’s UpFront program saying the fight “could end up before SCOTUS” and previewing arguments over federal preemption and consumer protection in emerging markets. See the segment from WISN: Sports betting lawsuits in Wisconsin could end up before Supreme Court.
That trajectory reflects a convergence of incentives and risks. States want clarity to police illegal gambling and protect tax bases tied to licensed operators. Companies want uniform rules to scale products that blur the line between traditional sports betting and financial contracts. The litigation posture in Wisconsin foreshadows a national test of jurisdiction, definitions and consumer safeguards for prediction markets that increasingly trade on sports, politics and pop culture.
A regulatory gray zone comes into focus
The argument advanced by several platforms is straightforward: if a product is an event contract regulated by the CFTC, then state gaming laws should not apply. Wisconsin counters that these products function as sports wagers, subject to state statutes and licensing. The CFTC’s swift response to the state action underscored the uncertainty. Parallel lawsuits risk inconsistent outcomes and could hasten a petition for the U.S. Supreme Court to resolve preemption or define where commodities oversight ends and sports betting oversight begins.
Elsewhere, governments are drawing sharper lines. In Chile, the nation’s top court voted to declare all online gambling illegal unless expressly authorized, ordering internet service providers to block unlicensed sites. The decision, described in detail in Chile’s Supreme Court clarifies online gambling laws, narrowed the field to state lotteries, racetracks and authorized casinos. Industry quickly aligned with the ruling. The Chilean Casino and Gambling Association called it a needed reset that ends the normalization of unauthorized operators and urged swift enforcement and “serious regulations,” as reported in Chilean Casino and Gambling Association responds to Chile Supreme Court ruling. While Chile’s framework differs from the U.S. patchwork, the through line is clear: courts are stepping in where legislatures have lagged, forcing bright-line definitions for online wagering.
Courts are setting the consumer stakes
The friction between innovation and oversight is not only about jurisdiction. It is also playing out in disputes over consumer rights and operator obligations. In Michigan, the state’s Supreme Court unanimously revived a gambler’s US$3.1 million claim against BetMGM tied to alleged unpaid winnings, reversing lower courts and sending the case back to trial. The justices signaled that legalization of internet gambling may open new rights under common law as courts adapt to the Lawful Internet Gaming Act. The operator has said it does not comment on pending litigation and argued a malfunction clause controls the dispute. The Detroit News has tracked the case’s twists and the claimant’s withdrawals before the suspension; see Michigan woman scores high court win in $3.1M case against BetMGM.
For Wisconsin’s feud, that Michigan ruling underscores what is at risk: if products are deemed gambling subject to state law, operators face different consumer protections, dispute paths and remedies than in federally supervised markets. If they are federally regulated event contracts, a separate set of protections and enforcement tools applies. Either way, courts are becoming de facto referees of product design, contract language and payment practices in an industry that has grown faster than the regulatory scaffolding around it.
Industry leans into mainstream culture
At the same time regulators and courts tighten guardrails, operators are pursuing growth through brand tie-ins that make gambling feel more like entertainment. BetMGM’s multiyear deal with Fremantle grants exclusive rights to slot, table and nontraditional casino games based on The Price Is Right and Family Feud, with integrated TV sponsorships to follow. The strategy, outlined in BetMGM secures exclusive rights to Fremantle’s Family Feud and The Price Is Right brands, aims to convert decades of pop culture familiarity into online casino engagement.
This mainstreaming push sits uncomfortably alongside intensifying policy concerns. Branding that normalizes wagering could draw scrutiny if courts or lawmakers see it as targeting casual fans or younger audiences, especially as platform categories blur. If Wisconsin’s case delineates what counts as a bet under state law, crossovers between gameshows, casino products and event markets may face new disclosures, licensing or distribution limits in some states.
Global pressure and the path ahead
Wisconsin’s lawsuit arrives as international courts and policymakers grapple with social costs tied to easy-access betting apps. India’s Supreme Court recently heard a plea to ban online sports betting apps nationwide, citing youth harm and high-profile endorsements. The petition, summarized in The Supreme Court of India hears plea to ban all online sports betting apps, prompted notices to the central government and top law officers. While India’s legal framework and market differ from the U.S., its top court’s engagement illustrates a shared pattern: when product adoption races ahead of statutory updates, the judiciary is pulled into policy gaps, often with sweeping consequences.
For Wisconsin, the immediate questions are narrower but consequential. Do certain prediction markets function as sports bets under state law even if framed as federally regulated event contracts. Does federal commodities oversight preempt state gambling restrictions when products implicate sport outcomes. How those issues are resolved will shape not only the future of prediction markets but also the compliance playbooks for sportsbook operators, fintechs and media brands blending wagering with content. If the dispute progresses toward the U.S. Supreme Court, as observers suggested on WISN’s UpFront, the ruling could reset the national balance between innovation and consumer protection in digital wagering.
The through lines from Santiago to Lansing to Madison are consistent. Courts are clarifying definitions, demanding accountability and compelling regulators to move. Operators are experimenting with product design and cultural partnerships to expand their base. Consumers sit in the middle, relying on clear rules, reliable payouts and transparent risk. However Wisconsin’s case is decided, it will be a bellwether for how the next wave of betting-adjacent products are classified, marketed and policed across the U.S.
