Kentucky made its next move in its push against unregulated sports betting and gambling in the commonwealth.
Atty. Gen. Russell Coleman announced Wednesday he filed three lawsuits in Franklin Circuit Court against prediction markets, a sweepstakes operator and a cryptocurrency platform:
- Kalshi and affiliates, including Coinbase
- Polymarket and its affiliates
- VGW
The lawsuits came after a coalition of prediction markets platforms sued the commonwealth over its recently passed law looking to tax the operators.
Kentucky illegal sports betting arguments
The lawsuit argues Kalshi and Polymarket are offering gambling without following state regulations. It noted that sports makes up 70% of trading volume. It also notes that Polymarket’s advertising provides false impressions that it is authorized for sports betting in Kentucky.
“Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws,” Coleman said in a 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…’”
The lawsuit also said the operators offer few or no resources for problem gamblers.
Sweepstakes lawsuit
Coleman argues VGW and its sites offer unlawful casino wagering through its dual-currency system.
“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.”
All three lawsuits allege violations of the Kentucky’s Consumer Protection Law, the Loss Recovery Act and the commonwealth’s gambling laws.
KY ready to fight lawsuits
Coleman vowed to fight the coalition lawsuit.
“You can bet our Office will defend these statutes and the people of our Commonwealth from out-of-state companies that seek to cancel Kentucky’s sports betting laws,” Coleman said, per the Associated Press. “In any courtroom, the attorneys with the AG’s Office are the odds-on favorite to win.”
Coleman has also joined a majority of state attorneys general in a letter to the CFTC looking to protect state rights to regulate prediction markets.
“There’s not a dollar’s worth of difference between prediction markets’ sports contracts and sports betting, and Kentucky has the jurisdiction and the responsibility to set the rules of the road,” Coleman said.“Along with nearly every other AG in the country, we’re asking the federal government to recognize that states like Kentucky are well-positioned to protect our people, just like we have been doing for over a century.”
He also joined two briefs in federal appellate courts supporting other states.
