TLDR Kentucky AG Russell Coleman filed three lawsuits against Kalshi, Polymarket, and VGW, claiming they run illegal gambling operations in the state. Kalshi and Polymarket are accused of operating unlicensed sportsbooks through their sports prediction market contracts. Coinbase, Robinhood, and Webull are named as co-defendants for partnering with Kalshi. Kalshi reportedly generated nearly $23 billion in contract volume last year, with about 89% tied to sports markets. VGW faces claims its Chumba Casino and LuckyLand Slots brands constitute real-money gambling under Kentucky law.
Kentucky Attorney General Russell Coleman filed three lawsuits on Wednesday against prediction market platforms Kalshi and Polymarket, and sweepstakes casino operator VGW. Coleman claims all three companies are running illegal gambling operations in Kentucky without the required state licenses.
The lawsuits allege violations of Kentucky’s Consumer Protection Act, gambling laws, and Loss Recovery Act. The state is asking courts to stop all three companies from operating in Kentucky.
Prediction Markets Called Unlicensed Sportsbooks
At the heart of the cases against Kalshi and Polymarket is the argument that their sports-event contracts meet Kentucky’s legal definition of sports wagering. The state says both companies accept bets from Kentucky residents without a license from the Kentucky Horse Racing and Gaming Commission.
Kalshi reportedly generated nearly $23 billion in contract volume in 2024. The AG’s office says about 89% of that was tied to sports markets. During a sample period in 2025, sports contracts made up roughly 70% of its trading volume.
The Kalshi complaint also names Coinbase Financial Markets, Robinhood Markets, Robinhood Derivatives, and Webull as defendants. Kentucky says those companies partnered with Kalshi to offer prediction market products on their platforms.
Coleman argues prediction market operators are bypassing the consumer protections, licensing requirements, and tax obligations that licensed sportsbooks must follow.
Legal Backdrop and What Comes