Kalshi sues Iowa, alleges AG threatened enforcement

Prediction market Kalshi filed a federal lawsuit Wednesday in Iowa against Attorney General Brenna Bird and the Iowa Racing and Gaming Commission, alleging the attorney general threatened enforcement to stop the company from offering sports event contracts in the state.

The complaint says the dispute began when a Kalshi representative met with Bird expecting to discuss a proposed tax bill. The filing describes the representative meeting instead with a panel of state attorneys, including Iowa’s Solicitor General, who asked pointed questions about whether Kalshi’s federally regulated offerings violate Iowa law.

Kalshi says it then sought written assurances that the attorney general did not plan to bring an enforcement action. The complaint reports a representative of the attorney general responded in writing, “we will not give any assurances about potential future enforcement.” The filing also quotes the company’s representative as saying Bird told him she had been “looking at” Kalshi “for a long time.”

The company argues in its complaint that federal law preempts Iowa regulation. Kalshi is a designated contract market and contends the Commodity Futures Trading Commission has exclusive jurisdiction over the event contracts it lists. Those contracts let users buy and sell positions on the outcomes of sporting events.

Kalshi has advanced similar pre-emption claims in other suits with state regulators. Federal courts have reached differing results: a federal court in Ohio denied Kalshi’s request to block state regulators from acting against its sports contracts; a court in Massachusetts barred the company from offering the contracts in that state; Nevada sued Kalshi after an appeals court refused to halt state action; federal judges in New Jersey and Tennessee have issued temporary orders blocking enforcement while litigation proceeds.

In the Iowa filing, Kalshi asks the court to declare that federal law prevents Iowa from applying state gambling laws to Kalshi’s contracts and to enjoin the attorney general and the racing and gaming commission from pursuing enforcement. The complaint cites the May meeting and the written refusal to provide assurances as the basis for seeking immediate relief to prevent what Kalshi describes as an imminent enforcement threat.

The filing does not include a public response from the attorney general’s office or the Iowa Racing and Gaming Commission.