President Donald Trump has expressed that states should not engage with companies like Kalshi and Polymarket, yet a strong GOP state is opposing that perspective.
By Jesse Hamilton|Edited by Nikhilesh DeUpdated Jun 17, 2026, 9:55 p.m. Published Jun 17, 2026, 9:20 p.m. 3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Kentucky has filed a lawsuit against Kalshi and Polymarket, opposing President Donald Trump's position. (Douglas Sacha/Getty Images)SummaryShow- Kentucky has joined other U.S. states in legal actions against prediction market platforms involved in sports betting.
- This adds complexity to the legal struggle, as Kentucky is a Republican state that supported President Trump, who favors federal regulation over state intervention.
The Attorney General of Kentucky has initiated lawsuits against prominent prediction market companies Kalshi and Polymarket, alleging they are illegally operating sports betting without the necessary licenses, thus joining the ranks of states challenging the industry's expansion.
Despite Kentucky's strong Republican leanings, having supported Trump with a 64% majority in the 2024 elections, the state finds itself opposing one of Trump’s own regulatory positions, which states that oversight of prediction markets should be managed federally by the Commodity Futures Trading Commission (CFTC).
Kentucky's argument mirrors those of other states, claiming that these platforms lack the appropriate gaming licenses. Furthermore, it has stated that the companies and their affiliates — including Coinbase, Robinhood, and Webull — do not provide the required resources for individuals facing gambling issues, as mandated by state law.
“Kalshi and Polymarket are functioning as illegal sportsbooks in Kentucky and violating our laws,” asserted Kentucky Attorney General Russell Coleman, a Republican and former U.S. attorney appointed by Trump. “These multi-billion dollar companies and their legal structures don’t meet basic standards.”
Locations where the CFTC has filed lawsuits or participated in ongoing legal actions against states regarding prediction market oversight. (Jesse Hamilton/CoinDesk)A representative from Polymarket expressed eagerness to contest the allegations.
“This action contradicts the CFTC's established framework for regulating prediction markets,” the representative stated in an email to CoinDesk.
States that have filed lawsuits against prediction markets have faced counter lawsuits from the CFTC, with Chairman Mike Selig taking a robust legal approach to defend the agency's authority as the exclusive regulator of event contracts, asserting that these fall under the CFTC's jurisdiction over U.S. derivatives.
Trump has recently supported this position.
"It is essential that the CFTC’s exclusive authority over Prediction Markets is preserved, enabling them to prosper," Trump stated on his social media platform, Truth Social. "Under my administration, we are establishing 'rules of the road' that set the Gold Standard for the States."
He criticized state-level political adversaries (naming Minnesota Governor Tim Walz and Illinois Governor J.B. Pritzker) as "SCUM" who should not dictate regulations.
"This is a significant industry, and we must safeguard it," Trump emphasized. "Mike Selig, CFTC Chairman, is doing an excellent job and is respected by all."
The CFTC has taken legal action against eight states — most recently New Mexico — and has intervened in other ongoing court cases within the sector.
However, Selig's position, as the only current member of a five-member commission, has its critics. Trump’s former chief of staff, Mick Mulvaney, now the executive director of Gambling Is Not Investing, argues against the prediction market surge as an inappropriate avoidance of state laws.
Additionally, former SEC and CFTC Chairman Gary Gensler, who previously took on the crypto sector during his SEC leadership, recently submitted a brief to the Sixth Circuit Court of Appeals contending that Kalshi's sports betting violates state gaming laws.
A federal judge recently denied Polymarket's request to block Michigan from pursuing legal action against the platform. Such legal disputes have become increasingly common as the industry mounts its defense, and many expect the issue to escalate to the U.S. Supreme Court for a final decision.
UPDATE (June 17, 2026, 21:27 UTC): Includes response from Polymarket.
UPDATE (June 17, 2026, 21:55 UTC): Includes map.
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CEX Volumes Drop to Lowest Since September 2024 as RWA Perps Hit Record High
CEX Volumes Drop to Lowest Since September 2024 as RWA Perps Hit Record High
In May, combined exchange volumes decreased by 3.45% to $4.41 trillion; the lowest level since September 2024. RWA perpetual futures volumes increased by 10.4% against this trend, reaching a new all-time high.
By CoinDesk ResearchJun 15, 2026In May, combined exchange volumes decreased by 3.45% to $4.41 trillion; the lowest level since September 2024. RWA perpetual futures volumes increased by 10.4% against this trend, reaching a new all-time high.
Why it matters:
In May, combined exchange volumes decreased by 3.45% to $4.41 trillion; the lowest level since September 2024. RWA perpetual futures volumes increased by 10.4% against this trend, reaching a new all-time high.
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