Kentucky has turned its prediction market fight into a court battle. Attorney General Russell Coleman announced three lawsuits against Kalshi, Polymarket and VGW, widening a legal fight that already stretches across several U.S. states.
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Kentucky officials now want a judge to decide whether prediction market sports contracts count as illegal betting under state law.
Coleman said the lawsuits accuse “each of these companies of operating unlicensed and illegal sports betting and gambling platforms in Kentucky.” The filings target Kalshi and its affiliates, including Coinbase, along with Polymarket and its affiliates. VGW, a major sweepstakes casino operator, also faces a separate legal action.
“Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws,” Coleman said in a press release. “These multi-billion dollar corporations and their legal fictions don’t pass the sniff test. As one of our state legislative leaders said it best, ‘If it looks like a duck and quacks like a duck …”
Kentucky argues that sports event contracts look too much like online sports betting to operate without state approval. Kalshi and Polymarket have argued in other markets that their exchanges fall under federal commodities law, not state sports betting rules.
The lawsuits also mention responsible gambling. According to Coleman, the companies offer “few or no resources” for responsible and problem gambling, another point that Kentucky plans to use in court.
The court cases arrive just before a new Kentucky law takes effect on July 15. That law blocks licensed sportsbook operators in Kentucky from partnering with prediction market companies such as Kalshi and Polymarket.
Coleman had already joined other state attorneys general in arguing that states should control sports betting inside their borders. His office also filed briefs in other prediction market cases before taking direct action in Kentucky.
The Kentucky lawsuits now join a wider U.S. fight over prediction markets, sports contracts and state gaming laws. State regulators, tribal gaming groups and licensed sportsbook operators have all raised concerns over federally regulated exchanges offering markets that look close to sports betting.
For Kentucky, the argument stays direct. The state says these products need gambling approval. Prediction market operators say they operate under a different federal framework. Franklin Circuit Court will now help decide how that fight plays out in Kentucky.