Wisconsin Seeks Court Order to Block Sports Prediction Market Trading on Kalshi, Coinbase, and Robinhood

Wisconsin moved this week to block sports event contract trading on Kalshi, Coinbase, and Robinhood while its lawsuit against the platforms proceeds in federal court. The state filed a motion for a preliminary injunction in the United States District Court for the Western District of Wisconsin, asking the court to temporarily halt all sports-related prediction market trading accessible to Wisconsin residents until the underlying legal dispute over jurisdiction is resolved.

The motion, filed Tuesday, describes the trading activity as “open, repeated, ongoing criminal violations” of Wisconsin’s gambling laws. The state contends that Kalshi, which operates as a federally regulated event-contract exchange, and its partner platforms Coinbase and Robinhood are effectively running an unlicensed sports wagering operation in the state. Wisconsin is seeking to hold all three companies directly responsible — an approach that differs from most other state actions, which have focused primarily on Kalshi itself.

Why the Seventh Circuit Matters

The Wisconsin case is playing out in a federal circuit that has not yet weighed in on the core question: whether prediction market event contracts tied to sporting events fall under the exclusive jurisdiction of the Commodity Futures Trading Commission, or whether state gambling laws can apply. The Third Circuit Court of Appeals has already ruled in favor of federal preemption, allowing Kalshi to operate in New Jersey over state objections. The Ninth Circuit, Fourth Circuit, and Seventh Circuit — which covers Wisconsin — have pending cases. Legal experts have suggested that conflicting rulings between circuits could ultimately send the issue to the Supreme Court, potentially by 2027.

The CFTC, under Chairman Michael Selig, has argued aggressively for exclusive federal jurisdiction, filing lawsuits against multiple states including Wisconsin after the state sued the platforms in April. That federal intervention means the Wisconsin case involves not just the state and the three private defendants but also a direct assertion of federal supremacy over state gambling enforcement.

The Multi-State Legal Picture

Wisconsin’s injunction request is one of several prediction market legal developments moving simultaneously. Illinois enacted a law in its fiscal year 2027 budget requiring prediction market platforms to obtain state gaming licenses and pay revenue taxes — becoming the second state after Minnesota to formally regulate the industry. Minnesota’s outright ban on prediction markets takes effect August 1, 2026, following Gov. Tim Walz’s signature in May, and the CFTC immediately filed suit to block it. Rhode Island and New Mexico have also filed lawsuits against Kalshi this year, bringing the total number of states with active litigation against prediction market platforms to more than a dozen.

For sports bettors in Wisconsin and other contested states, the practical implication is continued uncertainty. Residents who have been using Kalshi, Robinhood, or Coinbase to trade on sporting events may find access disrupted if the court grants Wisconsin’s injunction request. The defendants have not yet filed responses to the motion, and a ruling on the preliminary injunction could come within weeks or months depending on the court’s calendar.

The Wisconsin litigation is particularly consequential for Robinhood and Coinbase because it tests whether routing platforms can be held liable alongside the underlying exchange. If courts begin treating intermediaries as co-defendants, the risk calculus for companies that route prediction market trades could change significantly across the industry.