Major sportsbooks are raising red flags over Wisconsin’s proposed mobile betting legislation, citing revenue-sharing concerns and potential legal complications that could hinder market viability.
Key Takeaways:
- Wisconsin’s proposed 60% revenue share to tribes deemed financially unsustainable by major operators
- Current bill language creates legal vulnerabilities according to industry representatives
- Ho-Chunk Nation has filed a federal lawsuit against prediction market Kalshi for alleged illegal gambling operations
Industry Giants Push Back on Wisconsin’s Mobile Betting Framework
Leading sportsbook operators have expressed significant concerns about Wisconsin’s proposed mobile sports betting legislation during a recent Senate hearing. Representatives from the Sports Betting Alliance (SBA), which includes DraftKings, FanDuel, BetMGM, Fanatics, and bet365, warned that the current framework would make operations financially untenable.
The proposed legislation would direct 60% of gross revenue from mobile wagering to tribes when bets are processed through servers on tribal lands. During Tuesday’s Senate hearing, SBA counsel Damon Stewart characterized the plan as “a bit of a rush,” highlighting that the bill’s language needs revision to prevent legal exposure.
“The current bill is flawed,” Stewart noted, referring to Senate Bill 592 and its companion Assembly Bill 601. These bills implement a “hub and spoke” model similar to Florida’s system, allowing statewide mobile betting provided all wagers route through tribal servers.
Sen. Howard Marklein cautioned that any modifications would necessitate renegotiating gaming compacts and securing federal approval from the Bureau of Indian Affairs.
Forest County Potawatomi Attorney General Jeff Crawford emphasized that Wisconsin’s professional sports teams support regulated expansion, noting that offshore markets captured approximately $1 billion in wagers from state residents in 2024.
Ho-Chunk Nation Takes Legal Action Against Kalshi
While lawmakers debate expanding legal wagering options, the Ho-Chunk Nation has initiated a federal lawsuit against prediction market platform Kalshi. The lawsuit, filed in August, alleges violations of state, federal, and tribal gaming laws.
The complaint claims Kalshi operates an unlicensed gambling platform accessible nationwide, including on Ho-Chunk lands. While sports betting in Wisconsin remains restricted to tribal casinos under existing compacts, Kalshi allows users to stake money on various outcomes from sports to politics.
Kalshi maintains it functions as a federally regulated financial exchange rather than a sportsbook, arguing its contracts are tradable assets overseen by the Commodity Futures Trading Commission.
Ho-Chunk Nation President Jon Greendeer rejected this characterization, stating the platform is “clearly a gambling operation.” The lawsuit also targets Kalshi’s marketing practices, including its self-description as “The First Nationwide Legal Sports Betting Platform” and promotional phrases like “You can bet on that.”
The Nation seeks an injunction to halt Kalshi’s operations on or near its lands, plus monetary damages for lost tribal casino revenue. Similar legal actions were previously filed by three California tribes earlier this year.
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