Is this considered molesting?

Ok so I don't know what to use as a subject but we had an incident last weekend and not sure how to go from here...
Last week we all rode in the same car as my sister in law and her kids to an event. My oldest (6) sat in the back of the SUV with his cousin(11). Long story short my husband and I hear my son tell his cousin "Stop touching my penis" and the little boy tells my son "Shut up and give me my 3DS you sissy" immediately my husband yells at his nephew to keep his hands to himself and to move seats. My sister in law is listening but not once says anything. So we get home and I sit my boy down and explain to him that it is never ok for anyone to touch his privates. He then told me that Everytime he goes to my in laws the boy squeezes his peinis and threatens to not let him play. At this point I am livid and about ready to go to their house. My husband thinks I should just let it go and just not let him go anymore but I honestly want to get police involved since there are two toddlers at their house. 😡😡What  would you do? P.s the mom lets them do anything they want. She lets them run around like wild animals and never watches them, grandma does.