Wisconsin is intensifying its campaign against prediction markets, cautioning residents that engaging in betting on elections via these platforms could jeopardize their voting rights.
In a press announcement issued Tuesday, the Wisconsin Elections Commission (WEC) underscored that existing laws explicitly disallow betting on elections. The commission referenced statute 6.03, which states that individuals who have placed or become involved in any bets related to an election are disqualified from voting in that election.
Residents Wagering on Elections Risk Prosecution
The WEC elaborated that trading on elections through platforms like Kalshi and Polymarket may lead to legal repercussions. Wisconsin law categorizes intentionally voting in an election without proper qualifications as a Class 1 felony.
Those who place bets on election outcomes and attempt to vote afterward might face significant administrative hurdles. If these hurdles are overcome, they could render such individuals unable to cast their ballots, and the situation might result in a referral to the District Attorney. "We want voters to understand that they cannot legally make a bet on an election and cast a ballot in that same election," said WEC Administrator Meagan Wolfe.
However, Wolfe acknowledged that the agency might struggle to enforce these regulations. She commented, "We are not able to police someone placing a bet on these platforms, but it’s important for voters to understand the consequences if they bet on an election outcome."
State Lawsuits Against Major Prediction Market Operators
Earlier this year, Wisconsin legalized online sports betting through tribal exclusivity, shortly before initiating lawsuits against five major prediction market operators: Polymarket, Kalshi, Coinbase, Crypto.com, and Robinhood. The state accuses these operators of facilitating unlicensed sports betting via their sports event contracts, which, according to Wisconsin law, are indistinguishable from typical sports bets.
In a response, the Commodity Futures Trading Commission (CFTC) launched a counter-lawsuit against Wisconsin, alleging that the state is encroaching upon the agency’s exclusive authority to manage prediction markets. These legal disputes are ongoing, with Wisconsin attempting to move the cases back to state courts after the prediction market operators opted for federal court venues.
In Washington state, prediction markets faced additional legal challenges this week when a judge issued a preliminary injunction against Kalshi. Judge John McHale ruled that Kalshi operates as a betting platform and dismissed the company's claim that the Commodity Exchange Act (CEA) takes precedence over state legislation.
Governor Evers' Executive Order Against Insider Trading
Moreover, in May, Wisconsin Governor Tony Evers signed an executive order prohibiting state government employees from profiting from insider information related to prediction markets. The order states that all executive branch employees are strictly forbidden from disclosing or leveraging nonpublic information obtained through their roles to gain a personal advantage, or to aid others, including family members, in profiting or avoiding losses in prediction markets. Violators of this directive may face termination and potential criminal charges.
The WEC's warning adds yet another layer to the ongoing conflict between state authorities and prediction markets, highlighting the legal complexities surrounding this emerging sector.
