Kentucky Attorney General Russell Coleman has intensified the state’s crackdown on unlicensed gambling by filing lawsuits against online sweepstakes casino operator VGW and prediction market platforms Kalshi and Polymarket.
Three Lawsuits
According to a statement from the Attorney General’s Office, three separate lawsuits have been filed. One of them targets Kalshi and several affiliated companies, including cryptocurrency exchange Coinbase.
Another is aimed at Polymarket, while a third focuses on VGW, the company behind a number of popular sweepstakes casino brands.
The lawsuits center on allegations that Kalshi and Polymarket are effectively operating sportsbooks in Kentucky without obtaining the licenses required of regulated sports betting operators.
State officials say that the platforms enable users to trade contracts tied to sporting events, creating a product that closely resembles traditional sports wagering.
By operating outside Kentucky’s regulated sports betting framework, the companies are allegedly avoiding rules designed to protect consumers as well as taxes imposed on licensed operators.
The complaint against Kalshi claims that sports-related contracts account for the majority of trading activity on the platform. Meanwhile, the lawsuit against Polymarket alleges the company has promoted its sports prediction markets as legal for Kentucky residents despite state objections.
“If It Looks Like a Duck and Quacks Like a Duck…”
Kentucky has also named several affiliated companies in its legal actions. The lawsuit involving Kalshi alleges that Coinbase shared in transaction fees generated through trades on the platform.
Similar claims were made regarding Robinhood and Webull, which state officials identified as affiliates connected to Polymarket’s offerings.
Attorney General Coleman did not hold back in his criticism of the companies: “Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws.”
“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…’”, he added.
Coleman has been among the most vocal state officials on the issue. In May, he joined a bipartisan coalition of attorneys general calling for sports event contracts to fall under state gaming oversight rather than existing outside traditional gambling regulations.