Prediction Markets
By 
It’s been a lively week in the Commonwealth, with dueling lawsuits on prediction markets. The first:
A Washington-based lobbying group is suing Kentucky to challenge a recently enacted law that places an excise tax on prediction markets. The Coalition for Fair Markets filed a lawsuit Friday in Franklin County that alleges Kentucky’s first-in-the-nation law unfairly discriminates against their operation. The lawsuit lists Attorney General Russell Coleman, the commissioner of the Kentucky Department of Revenue and state horse racing gaming corporation, as defendants. Kentucky’s General Assembly enacted a 14.25% on prediction market transaction fees, which the coalition claims is discriminatory and violates federal law. “Kentucky’s new law not only targets federally regulated conduct but also discriminates against activity subject to exclusive federal control in multiple ways,” the lawsuit reads.
Kentucky’s attorney general filed three lawsuits against prediction market and gambling companies he said are operating unlicensed sports betting platforms illegally across the state. Lawsuits filed June 17 in Franklin Circuit Court by Attorney General Russell Coleman against Kalshi, Polymarket and VGW allege the companies are in violation of the state’s consumer protection laws, its loss recovery act and other recently enacted rules related to prediction markets. “Our office has a duty to stop illegal gambling in Kentucky regardless of how it’s packaged,” Coleman said in a news release. The lawsuits are asking a judge to agree the companies violated state law and order them pay the state up to $2,000 per violation of the Kentucky Consumer Protection Act in addition to $10,000 for every violation where conduct was harmful to a person over age 60.
Worth noting that both the AG and the Kentucky state legislature are GOP, so this isn’t really a partisan issue. I’m not enough of a law-talking person to judge which if either of these suits has merit, but from a policy perspective I hope that every one of those companies gets burned to the ground.