1 00:00:00,000 --> 00:00:26,280 Good afternoon, everybody. 2 00:00:26,280 --> 00:00:27,280 Thanks for joining. 3 00:00:27,280 --> 00:00:29,360 I'm Attorney General Josh Call. 4 00:00:29,360 --> 00:00:34,200 I'm here today to announce that the Wisconsin Department of Justice today has filed lawsuits 5 00:00:34,200 --> 00:00:39,520 against multiple companies and their affiliates alleging that they have been facilitating illegal 6 00:00:39,520 --> 00:00:41,960 sports betting in Wisconsin. 7 00:00:41,960 --> 00:00:49,840 The defendants in these cases include Kelsey, Robinhood, Coinbase, Hollymarket, Crypto.com, 8 00:00:49,840 --> 00:00:53,360 as well as affiliates of those companies. 9 00:00:53,360 --> 00:00:58,120 Except in limited circumstances, sports betting and other forms of commercial gambling have 10 00:00:58,120 --> 00:01:01,600 long been illegal in the state of Wisconsin. 11 00:01:01,600 --> 00:01:07,480 No company is above this law, no matter how creatively those companies try to disguise 12 00:01:07,480 --> 00:01:10,040 the activity that they're engaged in. 13 00:01:10,040 --> 00:01:15,960 As we allege in these lawsuits, these companies have chosen to flout Wisconsin law by thinly 14 00:01:15,960 --> 00:01:21,040 disguising the sports betting that they facilitate through what are called event contracts. 15 00:01:21,040 --> 00:01:26,360 But our position in this case is that event contracts are no different than ordinary sports 16 00:01:26,360 --> 00:01:27,680 bets. 17 00:01:27,680 --> 00:01:32,800 The companies collect a fee we allege for every bet that's made, leading them to earn 18 00:01:32,800 --> 00:01:38,680 significant revenue from Wisconsinites through violations of our state's gambling regulations. 19 00:01:38,680 --> 00:01:43,080 So we are asking the court in this case to declare that making sports-related events 20 00:01:43,080 --> 00:01:50,960 contracts available for trading by customers in Wisconsin is a violation of Wisconsin statutes. 21 00:01:50,960 --> 00:01:54,960 But these companies have repeatedly and openly violated those laws. 22 00:01:54,960 --> 00:01:59,720 And we're asking for the sports betting that we allege is going on and illegal to be shut 23 00:01:59,720 --> 00:02:00,720 down. 24 00:02:00,720 --> 00:02:06,600 So with that, I'm happy to answer any questions folks have about these new cases. 25 00:02:06,600 --> 00:02:07,880 Good afternoon, everyone. 26 00:02:07,880 --> 00:02:10,840 We will now take on topic questions from media members. 27 00:02:10,840 --> 00:02:13,240 If you have a question, please raise your hand. 28 00:02:13,240 --> 00:02:16,360 I will call on you in the order in which you ask your question. 29 00:02:16,360 --> 00:02:19,920 Once we call on you, we will promote you to panelists that you may speak. 30 00:02:19,920 --> 00:02:21,480 This may take a second. 31 00:02:21,480 --> 00:02:24,600 As a reminder, if you're on your phone, you can press star nine to raise or lower your 32 00:02:24,600 --> 00:02:30,040 hand and star six to mute or unmute yourself once you're called on. 33 00:02:30,040 --> 00:02:36,120 The first question will go to Eric Gunn. 34 00:02:36,120 --> 00:02:37,520 Thank you very much. 35 00:02:37,520 --> 00:02:43,360 Is this just a Wisconsin case or is it a multi-state? 36 00:02:43,360 --> 00:02:50,280 Are you with a number of other states that are filing also against these defendants? 37 00:02:50,280 --> 00:02:55,280 This is a Wisconsin specific case, though I would note, Eric, there are similar cases 38 00:02:55,280 --> 00:03:00,200 in a number of other states. 39 00:03:00,200 --> 00:03:03,200 Next question goes to Matt Smith. 40 00:03:03,200 --> 00:03:08,600 Hi, Attorney General, thank you. 41 00:03:08,600 --> 00:03:15,760 Is this related at all to the governor signing the online sports betting bill? 42 00:03:15,760 --> 00:03:17,840 There's no direct relationship between the two. 43 00:03:17,840 --> 00:03:23,840 What we are alleging is violations of Wisconsin law and the allegations would be the same 44 00:03:23,840 --> 00:03:28,720 whether or not there had been the new legislation passed. 45 00:03:28,720 --> 00:03:36,400 The only connection is that they relate to the same topic, which is online sports betting. 46 00:03:36,400 --> 00:03:39,120 Next question goes to Kate Morton. 47 00:03:39,120 --> 00:03:43,560 Hi, quick question. 48 00:03:43,560 --> 00:03:48,320 I was also wanting to ask about this new law that Governor Evers signed. 49 00:03:48,320 --> 00:03:54,560 How if at all this could play into that and also wouldn't this just strengthen the tribe's 50 00:03:54,560 --> 00:04:01,640 role in online gaming if and when these gaming compacts are revised in the state? 51 00:04:01,640 --> 00:04:06,840 The new law won't have bearing on what's alleged in this suit because the new law specifically 52 00:04:06,840 --> 00:04:13,480 relates to gaming that is conducted through facilities that are on tribal lands and with 53 00:04:13,480 --> 00:04:20,560 Wisconsin, that's not the case in these cases and so the allegations here are unimpacted 54 00:04:20,560 --> 00:04:24,840 by that new legislation. 55 00:04:24,840 --> 00:04:28,840 Next question goes to Todd Richmond. 56 00:04:28,840 --> 00:04:38,120 Hi, two questions, can we get copies of these lawsuits ASAP? 57 00:04:38,120 --> 00:04:44,520 And also, what other states have sued and similar to this? 58 00:04:44,520 --> 00:04:49,240 Yeah, so first in terms of the copies, we, if we haven't already sent out a release, 59 00:04:49,240 --> 00:04:51,080 we will be shortly. 60 00:04:51,080 --> 00:04:54,240 That will include a copy of the complaints. 61 00:04:54,240 --> 00:04:59,800 So if anybody needs that and doesn't receive that, please feel free to contact our office. 62 00:04:59,800 --> 00:05:01,720 We'll get that to you. 63 00:05:01,720 --> 00:05:06,320 In terms of the states, there are a handful of states where there were lawsuits that have 64 00:05:06,320 --> 00:05:10,680 been brought in New York state, just recently filed one and we can get you a more comprehensive 65 00:05:10,680 --> 00:05:12,800 list, Todd, if that's helpful. 66 00:05:12,800 --> 00:05:18,040 There are also a number of states where companies that are alleged to have engaged in this activity 67 00:05:18,040 --> 00:05:24,280 have themselves preemptively filed suits to try to prevent the states from bringing enforcement 68 00:05:24,280 --> 00:05:27,120 actions. 69 00:05:27,120 --> 00:05:30,280 Next question goes to Kimberly. 70 00:05:31,280 --> 00:05:40,960 Yeah, what is your message to people who use these apps who may be impacted by this lawsuit? 71 00:05:40,960 --> 00:05:46,120 Our focus in this case is on the large companies that are operating these. 72 00:05:46,120 --> 00:05:53,320 As I mentioned, the defendants here are Kelsey, Robinhood, Coinbase, Hollymarket, Crypto.com, 73 00:05:53,320 --> 00:05:54,320 and their affiliates. 74 00:05:54,320 --> 00:06:03,080 And so we are taking action to uphold Wisconsin law and ultimately seeking to shut down the 75 00:06:03,080 --> 00:06:09,560 sports gambling operations that we allege that those companies are engaging in in Wisconsin. 76 00:06:09,560 --> 00:06:12,800 Next question goes to Jason. 77 00:06:12,800 --> 00:06:19,480 Mr. Attorney General, thank you so much for your time. 78 00:06:19,480 --> 00:06:23,320 Do you know how much money these companies have made on Wisconsin bets? 79 00:06:24,320 --> 00:06:26,960 We don't have Wisconsin specific information in the complaint. 80 00:06:26,960 --> 00:06:33,000 We make reference to reporting that indicated that Kelsey, for example, made about $1.3 81 00:06:33,000 --> 00:06:40,000 billion in a year that's not Wisconsin specific, but we do know is that, and frankly, if you 82 00:06:40,000 --> 00:06:44,840 watch television commercials during a significant sporting event, you can see this. 83 00:06:44,840 --> 00:06:51,480 There's been widespread promotion of this activity and just simply going online, you 84 00:06:51,480 --> 00:06:57,560 can see how an alleged sports back could be placed. 85 00:06:57,560 --> 00:07:00,520 Next question goes to Jesse. 86 00:07:00,520 --> 00:07:05,200 Hi, thank you. 87 00:07:05,200 --> 00:07:06,840 That's sort of technical question. 88 00:07:06,840 --> 00:07:10,520 When you refer to event contracts, is that interchangeable with prediction markets or 89 00:07:10,520 --> 00:07:14,120 is it a subset of that activity? 90 00:07:14,120 --> 00:07:20,720 The platforms where this is taking place are known as prediction markets and what we allege 91 00:07:20,720 --> 00:07:25,280 is that the way these companies have framed this is that you can, on those prediction 92 00:07:25,280 --> 00:07:29,000 markets, purchase what they call an event contract. 93 00:07:29,000 --> 00:07:35,760 What we allege here is that the event contracts on sporting events are indistinguishable legally 94 00:07:35,760 --> 00:07:40,680 or practically, for that matter, from sports betting and constitute sports betting under 95 00:07:40,680 --> 00:07:43,880 Wisconsin law. 96 00:07:43,880 --> 00:07:47,040 Next question goes to Todd. 97 00:07:47,040 --> 00:07:55,560 Yeah, I know that you said there is no relationship between the bill the governor signed in these 98 00:07:55,560 --> 00:07:59,280 lawsuits, but the timing is just blatant. 99 00:07:59,280 --> 00:08:05,640 I'm wondering, did the tribes request that these lawsuits be filed, or is this a precursor 100 00:08:05,640 --> 00:08:11,320 to some kind of the new compact negotiations that the state must shut these operations 101 00:08:11,320 --> 00:08:13,920 down at the request of the tribes? 102 00:08:14,920 --> 00:08:16,440 Yeah, a couple of things I'll say, Todd. 103 00:08:16,440 --> 00:08:21,160 So first, in terms of your question about the timing, I mean, one thing that I think 104 00:08:21,160 --> 00:08:28,000 is clear is that there has been a huge increase in this type of activity that we allege is 105 00:08:28,000 --> 00:08:33,240 occurring in recent years, and that has had a number of consequences. 106 00:08:33,240 --> 00:08:37,160 And I certainly think that that may very well be linked to the fact that there was legislative 107 00:08:37,160 --> 00:08:42,520 activity on this topic recently, just as there has been litigation activity. 108 00:08:42,520 --> 00:08:49,840 But Wisconsin is not unique in bringing litigation activity on this topic, like I mentioned, 109 00:08:49,840 --> 00:08:52,240 as I indicated in New York. 110 00:08:52,240 --> 00:08:57,200 For example, just recently filed suit, and there are suits in other states as well. 111 00:08:57,200 --> 00:09:03,480 Ultimately, in this case, the decision that we make, I'm certainly aware that folks, there 112 00:09:03,480 --> 00:09:06,920 are folks out there who want to see these laws enforced, but the decisions that we make 113 00:09:06,920 --> 00:09:14,160 are based on the facts and the law, and that's what drove our decision to file the suit. 114 00:09:14,160 --> 00:09:15,920 These suits, I should say. 115 00:09:15,920 --> 00:09:18,920 Next question goes to Molly. 116 00:09:18,920 --> 00:09:28,800 Hi, I was wondering if you're seeking monetary damages, and if not, why not? 117 00:09:28,800 --> 00:09:33,960 Our primary focus right now is on shutting down the activity that we allege is unlawful 118 00:09:33,960 --> 00:09:38,160 sports betting that's being facilitated by these defendants. 119 00:09:38,160 --> 00:09:44,680 Now as the case moves forward, if we are foreclosing what we may do, but if we think that 120 00:09:44,680 --> 00:09:50,360 there is an adequate legal basis to seek some sort of relief and that the facts support 121 00:09:50,360 --> 00:09:56,840 that, we're not foreclosing that, but right now our primary focus is on shutting down 122 00:09:56,840 --> 00:10:03,480 the activity that we allege is illegal sports betting. 123 00:10:03,480 --> 00:10:07,880 The next question, we'll go to Jason, and this will be our last call for questions, 124 00:10:07,880 --> 00:10:12,880 so if anyone else has a question, please raise your hand after Jason, and we'll call on you. 125 00:10:12,880 --> 00:10:16,360 Jason, you're next. 126 00:10:16,360 --> 00:10:21,960 Does this complaint apply to just sports, or does it also apply to wages placed on world 127 00:10:21,960 --> 00:10:27,440 events like the war in Iran and politics like who's going to be the next president? 128 00:10:27,440 --> 00:10:31,240 The focus of these complaints is sports betting specifically. 129 00:10:31,240 --> 00:10:36,920 We allege that that's a very large percentage in the case of Kalshi, for example, of what 130 00:10:36,920 --> 00:10:41,000 takes place on their prediction market platform. 131 00:10:41,000 --> 00:10:48,320 So the focus of this is specifically on alleged sports bets. 132 00:10:48,320 --> 00:10:51,600 Next question goes to Sarah. 133 00:10:51,600 --> 00:11:01,120 Hi, the Trump administration recently issued an order reclassifying medical marijuana as 134 00:11:01,120 --> 00:11:07,200 well as FDA approved products that contain marijuana, and that's medical marijuana in 135 00:11:07,200 --> 00:11:09,960 states that license it. 136 00:11:09,960 --> 00:11:15,240 Will this order have any effect on Wisconsin, and if so what, and do you have any thoughts 137 00:11:15,240 --> 00:11:18,040 on what this order might signal going forward? 138 00:11:18,040 --> 00:11:22,000 Yeah, I saw the reporting that there has been this reclassification. 139 00:11:22,000 --> 00:11:26,640 I have not yet had a chance to analyze what the Trump administration has said. 140 00:11:26,640 --> 00:11:33,640 Of course, in Wisconsin, currently marijuana is criminalized, and so where I think there 141 00:11:33,640 --> 00:11:38,800 may be an impact is if the laws in Wisconsin change, then we would need to see how this 142 00:11:38,800 --> 00:11:44,640 federal update applies with respect to those changes of Wisconsin law. 143 00:11:44,640 --> 00:11:47,000 All right, thank you. 144 00:11:47,000 --> 00:11:52,200 We do not see any other hands raised, so we are going to conclude today's press conference. 145 00:11:52,200 --> 00:11:53,200 Thank you all for joining. 146 00:11:53,200 --> 00:11:57,400 If you have any further questions, please don't hesitate to reach out to the DOJ communications 147 00:11:57,400 --> 00:12:03,040 team at dojcommunications at doj.state.wi.us. 148 00:12:03,040 --> 00:12:04,040 Thank you. 149 00:12:04,040 --> 00:12:05,040 Thanks everyone.