Prediction markets could surge if Wisconsin stalls on sports betting bill, lawmaker warns

A Wisconsin lawmaker backing a proposal to expand mobile sports wagering warned on Wednesday that national prediction markets will move to fill the void if the state fails to authorize tribes to offer online betting. 

The warning came the same day that state lawmakers pulled the proposal from the Assembly floor to be taken up next year. Eyes are now cast toward the full legislative session starting in early 2026.

Rep. Tyler August, a Republican from Walworth and co-sponsor of Assembly Bill (AB 601), said leaving a “gray area” in state law would allow federally regulated prediction platforms to gain a foothold without Wisconsin’s consumer protections, oversight, or revenue safeguards.

“If we leave a gray area in state law, national prediction platforms will fill it without our compact framework, Wisconsin oversight, or Wisconsin consumer safeguards,” August wrote in a memo to lawmakers. “AB 601 channels activity into a regulated, Wisconsin-based, compacted environment with clear jurisdiction and accountability. This protects consumers, respects tribal sovereignty, and keeps revenue tied to Wisconsin operations rather than flowing to unaligned national apps.” 

AB 601 would permit the state’s 11 tribes to offer mobile sports wagering to anyone physically located within Wisconsin, provided sportsbook servers remain on tribal land. The bill requires Senate approval and the signature of Democratic Governor Tony Evers, who has indicated he supports keeping gaming with the tribes.

Prediction markets have expanded rapidly, with platforms such as Kalshi and Polymarket offering real-money event contracts similar to sports bets. Regulated at the federal level by the Commodity Futures Trading Commission (CFTC), these platforms do not pay state taxes. Kalshi handled $230.2 million in Week 11 of NFL activity and an overall $1.3 billion during the week of Nov. 3, up from $900 million in early October.

Major operators are also shifting focus. FanDuel and DraftKings recently withdrew from the American Gaming Association and plan to increase investment in prediction market products in states without legalized mobile wagering.

August’s memo included a 15-page legal analysis by attorney Ryan Walsh, representing the Forest County Potawatomi Community, asserting the bill is consistent with federal and state law. “The Bill and associated compacts would not violate any provision of the U.S. Constitution, federal law, or the Wisconsin Constitution and should be upheld in any litigation,” Walsh wrote.

The Sports Betting Alliance - representing DraftKings, FanDuel, BetMGM, Fanatics, and Bet365 - supports statewide mobile wagering but wants a structure allowing partnerships with tribes at a revenue share lower than the roughly 60% required under the Indian Gaming Regulatory Act. That rate is “too much to allow those companies to operate in the state,” SBA counsel Damon Stewart said.

The measure cleared committee with support from Rep. Robert Wittke, a Republican from Caledonia. “I think our citizens in Wisconsin are better served by keeping this new platform within our current gambling structure,” he said.