Case: 3:25-cv-00698 Document #: 1 Filed: 08/20/25 Page 32 of 47
123. Wisconsin prohibits sports betting outside of applicable compacts that the State has entered into with Indian tribes located in the State. Wisconsin prohibited the legislature from allowing lotteries, in its constitution and, despite the fact that the state has passed a number of amendments clarifying what is allowed, unless one of those specific amendments apply, schemes involving prize, chance, and consideration are illegal in Wisconsin. None of the limiting amendments allow for sports betting in Wisconsin. 124. State regulators in several states, including Nevada, New Jersey, and Maryland, have issued cease-and-desist letters to both Kalshi and Robinhood, accusing them of unlawfully offering sports wagering in the state and demanding the voiding of placed wagers. Letter from Mary Jo Flaherty, Interim Director, New Jersey Division of Gaming Enforcement, to Tarek Mansour, CEO, Kalshi (March 27, 2025). 20 In immediate response, Robinhood promptly ceased allowing New Jersey customers to open new positions on March Madness event contracts and implemented geofencing to restrict access in other states raising similar concerns. While Kalshi has noted that it also collects geolocation data, Kalshi has initiated lawsuits against state regulators to assert federal preemption or challenge the legality of state actions. 125. Even though it cannot deny that it is prohibited from listing products that even reference gaming, Kalshi continues to maintain that it is regulated by federal law under the CFTC; therefore, state gambling laws are preempted concerning their sports event contracts. Despite the wave of state enforcement attempts, Kalshi reported over 5.2 million trades totaling $1.6 billion for their sports event contracts from January through mid-2025. FIRST CAUSE OF ACTION
20 https://www.nj.gov/oag/ge/docs/EmergencyOrders/Kalshi2025.pdf
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