Kentucky Attorney General Russell Coleman filed three lawsuits against prediction markets and an online casino-style gaming company, he announced Wednesday. The lawsuits allege that the companies in question violated the state’s consumer protection and gambling laws.
Coleman’s lawsuits name Kalshi and Polymarket, prediction markets that let customers buy and sell “event contracts,” allowing a person to bypass state restrictions on gambling to vote “yes” or “no” on real-world outcomes. Coleman argues that much of the platforms’ trading comes from what is essentially sports wagering, just under a different name.
“Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws,” Coleman said in a statement. “These multi-billion dollar corporations and their legal fictions don’t pass the sniff test.”
The third lawsuit targets VGW and its suite of sweepstakes casino platforms: Chumba Casino, Global Poker and LuckyLand Slots. Coleman argues the games look like any standard casino game, such as slot machines and blackjack. The lawsuit appears to specifically target the company’s virtual coins, which Coleman says function like casino chips.
“This company may use new technology and a new scheme to hide, but the reality is the same,” Coleman said. “Our office has a duty to stop illegal gambling in Kentucky regardless of how it’s packaged.”
Coleman has previously joined a bipartisan coalition of attorneys general who believe states should have the ability to regulate sports betting on prediction markets. Coleman also joined briefs defending gaming rules in Ohio and Tennessee from Kalshi’s lawsuits.
In a statement to Kentucky Public Radio, a Polymarket spokesperson said the action runs counter to the federal regulations governing prediction markets.
"We look forward to addressing these claims through the appropriate legal process," the spokesperson said.
Kentucky’s set of lawsuits answers a lawsuit that a coalition of prediction market companies filed last week, challenging Kentucky’s latest 14.25% tax on their transaction fees. The lawsuit alleges the new levy is discriminatory, unconstitutional and preempted by federal law.
The Trump administration has stood in support of prediction markets, rolling back regulations designed to curb them. The administration proposed new rules on the new markets that would allow its sports-related markets to largely continue, with some checks on markets vulnerable to manipulation.
Trump also said the federal government should maintain total control over prediction markets and derided governors who have attempted to rein them in, calling them “SCUM” on social media.
"We are setting the ‘rules of the road; that are the gold standard for the states," Trump said in a Truth Social post in May.
Trump's son, Donald Trump Jr., is an advisor to Kalshi and Polymarket, and his venture capital firm, 1789 Capital, is a major Polymarket investor.
Coleman’s office argues in the lawsuit the prediction markets operate as unlicensed sportsbooks. His office also argues that Polymarket and Kalshi offer little to no resources for Kentuckians who may be suffering from a gambling addiction. Under Kentucky law, 2.5% of sports betting tax revenue must go toward treating those with gambling addictions or issues and toward prevention.
Neither Kalshi nor VGW immediately responded to requests for comment.
This story has been updated to include comment from Polymarket.
