Kentucky Sues Kalshi, Polymarket and VGW Over Betting

On June 18, 2026, Kentucky Attorney General Russell Coleman filed three lawsuits against Kalshi, Polymarket and VGW. The complaints allege the companies operated unlicensed gambling platforms in Kentucky and violated the state’s gambling statutes, the Consumer Protection Act and the Loss Recovery Act. The filings ask courts to block the companies from offering services to Kentucky residents and to pursue remedies under state law.

The complaints say Kalshi and Polymarket offer sports-event contracts that meet Kentucky’s statutory definition of sports wagering and therefore require licensing through the Kentucky Horse Racing and Gaming Commission. Kentucky alleges both companies accepted wagers from state residents without the required licenses and seeks injunctions to stop their activities.

The Kalshi suit names Coinbase Financial Markets, Robinhood Markets, Robinhood Derivatives and Webull as partners that offered Kalshi’s prediction-market products on their platforms. The attorney general’s office alleges Kalshi generated nearly $23 billion in contract volume last year, with about 89% tied to sports markets and roughly 70% of trading tied to sports in a selected sample period in 2025.

A separate complaint targets VGW and its sweepstakes casino brands Chumba Casino, LuckyLand Slots, LuckyLand Casino and Global Poker. Kentucky argues VGW’s dual-currency sweepstakes model functions as real-money gambling and therefore violates state law. The suit asks courts to require licensing and consumer protections similar to those for traditional online casinos.

Kentucky enacted legislation this year imposing a 14.25% tax on online prediction market revenue and barring licensed sportsbooks from partnering with prediction market platforms beginning July 15. Less than a week before the state’s filings, the Coalition for Fair Markets filed a federal challenge to the tax and restrictions.

Earlier this year Coleman joined 40 other state attorneys general and the District of Columbia in urging the Commodity Futures Trading Commission to treat sports-event contracts as subject to state gambling regulation rather than as swaps. The CFTC has previously intervened in disputes and brought suits asserting exclusive jurisdiction over similar markets; those actions targeted states led by Democratic attorneys general and governors.

The complaints name company executives and platform partners and seek to recover alleged losses and block access for Kentucky residents. Coleman described Kalshi and Polymarket as “operating illegal sportsbooks in Kentucky and breaking our laws.” Courts in Kentucky will now consider the state’s claims and the operators’ defenses, which in other cases have included arguments about federal preemption and First Amendment protections.