Russell Coleman, the Attorney General of Kentucky, has initiated three legal actions in the Franklin Circuit Court, focusing on purported illegal sports betting and online gambling activities occurring within the state.
The legal actions, lodged on Wednesday, target prediction market operators Kalshi and Polymarket in two distinct cases, while the third targets VGW, the online gaming platform behind Chumba Casino, Global Poker, and LuckyLand Slots.
Coleman’s office asserts that both Kalshi and Polymarket are conducting sports betting operations in Kentucky without the necessary state gaming licenses and are failing to adhere to Kentucky’s sports wagering laws. Additionally, the lawsuits contend that the companies’ marketing practices mislead consumers into believing their sports wagering services are sanctioned under Kentucky legislation.
“Kalshi and Polymarket are running unlawful sportsbooks in Kentucky and violating our statutes,” Coleman stated in a press release. “These multi-billion dollar entities and their legal constructs lack credibility. As one of our state legislative leaders aptly pointed out, ‘If it looks like a duck and quacks like a duck…’”
The allegations include breaches of Kentucky’s Consumer Protection laws, the Loss Recovery Act, and the state’s gambling regulations. Coleman’s office claims that these operators avoid consumer protection obligations and tax responsibilities that are mandated for licensed gambling entities in Kentucky.
The filings also underscore issues related to responsible gambling. Coleman pointed out that Polymarket, Kalshi, and associated companies like Coinbase, Robinhood, and Webull provide minimal or inadequate resources for users to identify gambling-related issues or seek assistance, in defiance of Kentucky’s safeguard standards.
In the lawsuits, Coleman noted that the defendants permit individuals over 18 to take part with a mere sign-up process, while offering few mechanisms concerning financial responsibility or the potential for monetary loss.
The lawsuits demand both temporary and permanent injunctive relief against Kalshi and Polymarket, alongside any recoverable damages owed to the Commonwealth.
The distinct lawsuit targeting VGW and its affiliates claims that the firm operates an illegal sweepstakes casino site utilizing two varieties of virtual gambling tokens. Coleman’s office contends that these games mimic traditional casino offerings, encompassing slot machines and blackjack.
The lawsuit states that participants utilize real funds to acquire “sweeps coins” for the games, comparing these tokens to poker chips used in physical casinos.
Coleman emphasized that his office is obligated to curb illegal gambling within Kentucky, irrespective of the technology or model employed to facilitate such activities. The lawsuit also charges that VGW misrepresents its sweepstakes casino offerings to regulators and the public as harmless video games, while maintaining that they operate as illegal online casinos. The complaint seeks to recapture losses incurred by citizens and terminate access to the websites.