Key Facts

• Kentucky's Attorney General Russell Coleman filed lawsuits in state court against Polymarket, Kalshi, and Kalshi's partners Coinbase, Robinhood, and Webull, accusing them of operating unlicensed and illegal sports betting and gambling platforms in the state.
• The lawsuits claim that Polymarket, Kalshi, and their partners are "doing business without a Kentucky gaming license or following state regulations" and that their sports event contracts "fall squarely within the definition of 'sports wagering' under Kentucky law."
• Kalshi and Polymarket together recorded $25 billion in monthly trading volume in May, according to Token Terminal, and are facing lawsuits from at least 17 other states, attracting the involvement of the US Commodity Futures Trading Commission and the White House.
• A Polymarket spokesperson stated that Kentucky's action "runs counter to the CFTC’s established framework for regulating prediction markets," while Kalshi spokesperson Jacki McGavick said that "Kalshi is a federally regulated exchange — the CFTC is our regulator, not the states."
• The legal battles between prediction market operators and US states have seen mixed results, with some courts siding with the states and others with the prediction markets, and may potentially reach the Supreme Court.