Prediction market warning sparks legal dispute

Polymarket and Kalshi are pushing back after the Wisconsin Elections Commission warned voters against using those platforms to place bets about what’s on their ballots.

Both Polymarket and Kalshi allow people to put money on the outcome of real-world events — like sports games, weather and elections. Those platforms have exploded in popularity, and they’ve been subject to numerous lawsuits alleging violations of state, federal and tribal gambling laws.

In a news release published Tuesday, the Wisconsin Elections Commission warned that voters could be found guilty of a felony if they bet on an election that they also voted in.

The commission pointed to a state law which disqualifies Wisconsinites from voting “in any election in which the person has made or become interested, directly or indirectly, in any bet or wager depending upon the result of the election.”

In a recent memo, WEC’s legal counsel concluded that, under that law, trades placed through Kalshi and Polymarket count as a “bet” or “wager.”

“Commission staff believe the prohibition against ‘any bet or wager depending upon the result of the election’ § 6.03(2) includes making trades on election-related prediction markets,” the memo says.

Kalshi and Polymarket, however, are disputing that conclusion. Those companies have argued that their sites don’t facilitate gambling. Instead, the companies have maintained that they should be regulated as financial exchanges because they allow people to buy and sell futures contracts.

“Kalshi has hundreds of thousands of users in Wisconsin,” a Kalshi spokesperson wrote in an email. “Implying they can’t vote because they use Kalshi is not only dishonest, it is voter suppression! If even a handful of our users in Wisconsin see this and get scared away from voting, that could EASILY swing an election.”

The spokesperson called WEC’s news release “incredibly dangerous to democracy,” and added “we hope the WEC retracts their statement before a court forces them to.”

A Polymarket spokesperson said that company would address WEC’s claims “through the appropriate legal process.”

During a meeting earlier this month, election commissioners reviewed the legal memo, and voted to send out a news release that would warn against election-related betting.

During that meeting, Commissioner Ann Jacobs said Wisconsin’s prohibition is in place for a good reason.

“You want people who have the ability to vote based upon who they believe is the best person for the job,” she said. “Not to line their pocketbooks.”