The Kentucky Attorney General’s Office is looking to regulate prediction market platforms that circumvent gambling law.
Prediction markets, like Kalshi and Polymarket, are platforms where users trade contracts on the outcome of future events, the attorney general’s office. The platforms allow users to place wagers on game winners, point spreads and player statistics, bypassing the consumer protections and tax requirements mandated by state gambling laws.
In a letter to the chairman of the Commodity Futures Trading Commission (CFTC), a bipartisan majority of state AGs argued that the CFTC lacks jurisdiction over the platforms’ sports-related contracts. They argue that these “event contracts” are no different from traditional sports wagering, such as those regulated by Kentucky’s Horse Racing and Gaming Corporation.
Kentucky has been setting rules for sports betting since well before the CFTC was created by Congress in 1974. The General Assembly created the first Kentucky Racing Commission in 1906 “to regulate the racing of running horses in the commonwealth.”
In their letter, the attorneys general underscore how states have the tools to set guardrails for sports betting and to protect users from problem gaming, the attorney general’s office said in a press release.
“There’s not a dollar’s worth of difference between prediction markets’ sports contracts and sports betting, and Kentucky has the jurisdiction and the responsibility to set the rules of the road,” Attorney General Russell Coleman said. “Along with nearly every other AG in the country, we’re asking the federal government to recognize that states like Kentucky are well-positioned to protect our people, just like we have been doing for over a century.”
The attorneys general caution that sports gambling poses serious risks to public health and financial security, with millions of Americans qualifying as problematic or pathological gamblers. The coalition asserts that states, and not the CFTC, are best equipped to protect their residents from the associated harms.
Coleman joined the comment letter led by attorneys general from Ohio, Nevada, Tennessee, New York, Utah and New Jersey. They are joined by Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, Virginia, and Wisconsin.
(Photo: Kentucky Attorney General Russell Coleman)
By Ken Howlett, News Director
Contact Ken at ken@k105.com
