Kentucky Sues Kalshi and Polymarket for Operating Illegal Sports Betting, Cites $23B Wagering Volume

According to The Block, Kentucky's Attorney General Russell Coleman filed three separate lawsuits on Wednesday against Kalshi, Polymarket, and related entities, including Coinbase and Robinhood, accusing them of operating unlicensed sports betting platforms in violation of state gambling laws.

The state alleged that Kalshi and Polymarket bypass consumer protection and tax requirements while offering sports event contracts. Coleman stated: "Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws." The complaint noted that 89% of Kalshi's $23 billion contract volume derives from sports wagering, and that Polymarket spreads "false and misleading" advertisements claiming legal status in Kentucky.