Kentucky Expands Legal Fight Against Kalshi and Polymarket Over Sports Contracts

Kentucky has joined the growing legal battle against prediction market companies by filing lawsuits against Kalshi, Polymarket and several major trading partners. State Attorney General Russell Coleman announced that the lawsuits accuse the firms of operating unlicensed sports betting platforms inside Kentucky.

The legal action also names Coinbase, Robinhood and Webull because of their partnerships with Kalshi. Coleman argued that the platforms are offering sports wagering products without following Kentucky gaming laws or holding proper licenses.

States Clash With Prediction Markets Over Regulation

Prediction market companies say their event contracts are financial products regulated under federal commodities law through the Commodity Futures Trading Commission (CFTC). However, several US states argue that contracts tied to sports events are simply sports betting products that require state approval.

Kentucky claimed the companies failed to provide gambling protection resources required under state law. Kalshi responded by saying it is regulated by the CFTC, not individual states, while Polymarket said the lawsuits conflict with federal regulatory rules.

The dispute is part of a wider national fight involving more than 17 states. Some courts have sided with prediction market firms, while others have ruled in favor of state regulators. The ongoing cases could shape how prediction markets operate across the United States in the future.