Kentucky Files Lawsuits Against Prediction, Sweeps Operators

The push to protect Kentucky’s online sports betting market isn’t over quite yet.

On Wednesday, Attorney General Russell Coleman filed a series of lawsuits against operators he accuses of offering illegal online gambling. Prediction market giants Polymarket and Kalshi, along with their affiliates, are all named in the lawsuits. 

While those operators are currently protected under the Commodity Exchange Act, the Attorney General slammed the industry’s argument that it isn’t offering gambling. 

“Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws,” AG Coleman shared in a statement. “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…”

The lawsuit comes a week after the state was sued by the Coalition for Fair Markets, a lobby group that includes both Polymakret and Kalshi. In the filing, they argue that the state’s recently approved tax on prediction markets is illegal and ask a court to intervene.

The Commodity Futures Trading Commission, which regulates prediction markets, has filed lawsuits against eight states to protect the emerging industry. However, the federal regulator has yet to confirm plans to include Kentucky in that growing fight.

VGW Also Faces Lawsuits

Prediction market operators weren’t the only ones targeted by Coleman and Kentucky.

The Attorney General also filed a lawsuit against VGW Holdings, which is one of the largest sweepstakes operators in the country. In it, Coleman argues that the dual-currency used violates state gambling laws.

Sweepstakes casinos don’t accept real-money wagers, but do offer a way for players to win cash prizes. However, sweep coins are required to earn those redemptions. While players can sometimes find some in promo offers or by betting them on the site, many are encouraged to purchase packs.

Coleman, along with several other attorneys general, believes this entices players to spend money in hopes of earning prizes. This crosses the line into gambling, leading to the lawsuit against VGW.