The attorney general of Rhode Island, Peter Neronha, does not seem to be intimidated by the pushback from the Commodity Futures Trading Commission (CFTC) and private companies from the prediction market sector.
Rhode Island Determined to Battle Prediction Markets over Sports Event Contracts
In fact, he has just launched a lawsuit of his own, targeting Kalshi and Polymarket, the de facto leaders in the space, and once again assailing their claim that they can offer event contracts on sports.
AG Neronha hopes that he can finally turf out Kalshi and Polymarket when it comes to prediction markets that specifically target sports events.
The argument by AGs and gaming regulator countries around the country runs that the companies are trying to offer a “gambling product” without actually going through the same rigorous process as a traditional gambling company.
While some sector-insiders, including DraftKings, have called these fears blown out of proportion, most lawmakers, regulators, and AGs have been doggedly tilting at this argument.
For their part, Kalshi and Polymarket have repeatedly and politely, albeit firmly, responded that they are regulated under the CFTC’s mandate and not subject to state gaming laws.
AG Neronha filed the lawsuit on Wednesday, May 21, and delivered the same argument – Kalshi and Polymarket offer sports wagering through their event contracts, without actually complying with Rhode Island’s gambling laws.
AG Not Backing Down from His View, Says RI’s Laws Must Be Followed
“There is no substantive difference between sports betting and ‘events contracts’ in this context; Kalshi and Polymarket know that, and we know that,” Neronha explained, adding that the problem is that the state law should have preeminence in this case, and alleging that the two platforms were evading those laws.
Essentially, AG Neronha wants a permanent injunction against the companies, blocking their ability to offer their sports event contracts locally, specifically. In the meantime, the CFTC has been pushing back (as have the private operators) against such displays of disagreement.
The CFTC has recently launched a lawsuit against Minnesota, as the state became the first in the country to outright ban prediction markets, marking a determined shift in how far states are willing to go in order to keep sports event contracts out.