FRANKFORT, Ky. (June 17, 2026) –Attorney General Russell Coleman announced today, in defense of Kentucky law, the launch of three lawsuits against prediction market platforms, a sweepstakes gambling platform and a cryptocurrency platform. General Coleman accuses each of these companies of operating unlicensed and illegal sports betting and gambling platforms in Kentucky.
The lawsuits were filed in Franklin Circuit Court against:
- Kalshi, a prediction market platform, and its affiliates including Coinbase;
- Polymarket, a prediction market platform, and its affiliates; and
- VGW, an online casino platform with brands including Chumba Casino, Global Poker, and LuckyLand Slots.
Prediction Market Lawsuits
Kalshi and Polymarket, prediction market platforms, allow users to place wagers on game winners, point spreads and player statistics, bypassing the consumer protections and tax requirements mandated by the Commonwealth’s gambling laws.
According to the lawsuits, Kalshi and Polymarket are doing business without a Kentucky gaming license or following state regulations.
Although Kalshi offers so-called “event contracts” on several topics, sports betting made up approximately 70% of its trading volume during a selected sample period in 2025. Last year, the platform saw nearly $23 billion in contract volume, 89% of that coming from sports wagering.
Polymarket’s flashy advertisements on social media and elsewhere give the false and misleading impression that it is authorized to offer sports wagering under Kentucky law. The platform offers many of the same traditional sports bets that a licensed sportsbook would, including money lines, spreads, point totals, parlays and prop bets. Simply calling them “sports event contracts” doesn’t make them legal.
Coinbase, a cryptocurrency trading platform, has partnered with Kalshi to operate unlicensed sports gambling on its platform. The two companies split the fee whenever a bet is made on Coinbase.
“Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws,” said Attorney General Coleman. “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…”
The prediction market lawsuits also allege Polymarket and Kalshi and its affiliated entities, Coinbase, Robinhood and Webull offer users few or no resources to identify or seek help for a gambling problem, which is mandated under Kentucky law.
Under state law, the Kentucky Horse Racing and Gaming Commission has the authority to regulate and license sports wagering. The Kentucky Horse Racing and Gaming Commission and its predecessor organizations have been regulating sports gambling in Kentucky since 1906.
In Kentucky, sports wagering operating licenses are only available to Kentucky’s licensed horse racing associations. Under the provisions of The Wagering Consumer Protection Act (26 RS HB 904), which became law earlier this year and will take effect July 15, 2026, licensed sports wagering operations are prohibited from contracting with Kalshi or Polymarket.
Read the Kalshi brief.
Read the Polymarket brief.
Sweepstakes Lawsuit
VGW and its affiliates operate unlawful sweepstakes casino websites that use two different types of virtual gambling chips. The sweepstakes casino games are designed to look and feel like traditional casino games with slot machines and blackjack games. According to a study cited in the complaint, they also exploit the same psychological triggers related to addiction.
The online casinos offer two types of chips – one for free and one with a cash value. Users pay real money for so-called Sweeps Coins just like gamblers pay for poker chips at a real casino. They are also able to cash out their winnings.
“This company may use new technology and a new scheme to hide, but the reality is the same,” said Attorney General Coleman. “Our Office has a duty to stop illegal gambling in Kentucky regardless of how it’s packaged.”
Read the VGW brief.
All three lawsuits allege violations of Kentucky’s Consumer Protection law, the Loss Recovery Act and the Commonwealth’s gambling laws.
The Attorney General’s Office of Consumer Protection Director Philip Heleringer and Assistant Attorneys General Daniel Keiser and Alex Scutchfield of the Office of Consumer Protection lead the litigation team, supported by Civil Chief Justin Clark, Division Chief for Consumer and Senior Protection Chris Lewis, and Deputy Director for Consumer Protection Jonathan Farmer.
Background:
Last month, General Coleman joined a letter signed by a bipartisan majority of state attorneys general standing up for the Commonwealth’s ability to regulate sports betting on prediction market platforms like Kalshi.
Kentucky has also joined two briefs in federal appellate courts – just one level below the U.S. Supreme Court – supporting other states’ attempts to protect their citizens from unregulated prediction markets.