Prediction market users could be barred from voting in Wisconsin
Prediction markets are becoming increasingly popular in the United States and continue to be the subject of legal disputes and court injunctions across the country. This time, the state of Wisconsin has warned residents who trade election outcome contracts on platforms such as Kalshi and Polymarket, two of the most popular prediction market platforms, that they could lose their right to vote and, if they still choose to cast a ballot, face criminal charges.
The warning was issued by the Wisconsin Elections Commission (WEC), which interprets this type of trading as prohibited election betting under state law. The move reflects the ongoing dispute between states, federal regulators and prediction market companies over the legal status of these contracts, which remain the subject of litigation in several US courts.
Election commission says contracts are equivalent to betting
The guidance was unanimously approved during a WEC meeting held on 9 July. During the session, commissioners adopted a legal opinion instructing election officials to inform voters about the potential consequences of participating in election-related prediction markets.
According to the commission, Wisconsin law provides that any voter who has directly or indirectly placed a bet whose outcome depends on an election loses the legal qualification required to vote in that election. This means that a person who trades contracts on the outcome of a presidential, gubernatorial or congressional election, for example, could not legally vote in that same contest.
If that individual votes regardless, they could face election fraud charges. Wisconsin law classifies such conduct as a Class I Felony, making it subject to criminal investigation and possible referral to local prosecutors. In addition, the vote may be challenged administratively before it is even counted.
Interpretation fuels debate over prediction markets
The commission’s opinion does not state that trading election contracts is, by itself, illegal. Instead, the interpretation focuses on the incompatibility between betting on the outcome of an election and participating in that election as a voter.
To support this position, the document states that Wisconsin’s legal definition of betting includes agreements in which a person may win or lose money depending on the occurrence of a particular event, even where some degree of skill or analysis is involved.
According to the commission’s legal staff, individuals who buy or sell contracts on prediction market platforms are staking money on the outcome of a future event and may receive profits or incur losses depending on the election result. As such, the activity falls within the legal definition of betting under the state’s election laws.
WEC Administrator Meagan Wolfe said the objective of the measure is to ensure that voters understand the consequences before participating in these markets.
Kalshi and Polymarket challenge the interpretation
The companies named by the commission immediately rejected the state’s interpretation. In a statement to Wisconsin Public Radio, Kalshi said that hundreds of thousands of users access its platform in Wisconsin and described the warning as an attempt to intimidate voters. According to the company, suggesting that users could lose their voting rights simply for using the platform amounts to voter suppression and could discourage citizens from participating in elections.
Polymarket also stated that it intends to challenge the commission’s position through the courts, saying it will respond to the allegations through the appropriate legal channels.
Both companies argue that their products are not traditional bets but financial event contracts regulated by the Commodity Futures Trading Commission (CFTC), the federal agency responsible for overseeing derivatives markets in the United States. This distinction lies at the heart of the ongoing legal disputes involving prediction markets across the country.
Dispute between states and federal government continues
In April, the state of Wisconsin filed lawsuits against Kalshi, Polymarket, Robinhood, Coinbase and other companies, alleging that the platforms were offering illegal gambling under state law. A few days later, the CFTC filed its own lawsuit against Wisconsin. The federal agency argues that US law grants it exclusive authority to regulate event contracts traded on authorised exchanges, preventing states from using their gambling laws to prohibit these products.
At the same time, Kalshi is also facing a lawsuit brought by the Ho-Chunk Nation. The tribe argues that sports event contracts amount to unauthorised Class III gaming without authorisation, in violation of federal legislation governing tribal casinos.
Market continues to grow despite legal challenges
Prediction markets gained significant attention during the 2024 US presidential election and have continued expanding the range of contracts they offer. Today, platforms such as Kalshi and Polymarket allow users to trade probabilities related to politics, the economy, sports, economic indicators, central bank decisions and many other future events.
Users purchase “yes” or “no” contracts, with prices fluctuating according to the market’s collective assessment of the likelihood of a particular event occurring. Supporters argue that these markets are an efficient way of aggregating information and, in some cases, can produce more accurate forecasts than traditional opinion polls.
Critics, however, argue that prediction markets may create conflicts of interest, pose manipulation risks and raise ethical concerns, particularly when election-related contracts are involved. In recent months, US authorities have also begun investigating potential cases involving the use of insider information in trades conducted on these platforms.
This article was first published on the Portuguese SiGMA News page on 23 July 2026.
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