- Rhode Island is suing Kalshi and Polymarket for unlawfully conducting sports gambling in the state with their sports-related event contracts.
- Kalshi sued Neronha and other Rhode Island officials for trying to stop their services in the state.
- While Kalshi argue they are legal and federally regulated, Rhode Island officials believe that prediction market companies circumvent state gambling laws.
PROVIDENCE, R.I. – Rhode Island Attorney General Peter Neronha issued a lawsuit against Kalshi and Polymarket late Thursday afternoon. Before they could sue the prediction market operators, Kalshi beat Rhode Island to the punch with a preemptive lawsuit.
Kalshi wants protection through an injunction and “emergency temporary restraining order” so that the state can’t prevent Kalshi from offering contracts to locals. Kalshi continues to argue that they’re legal, but AG Neronha says their event contracts are the same as sports betting, harming a major revenue stream for the nation’s smallest state.
“There is no substantive difference between sports betting and ‘events contracts’ in this context; Kalshi and Polymarket know that, and we know that,” said Attorney General Neronha in a Thursday press release. “The problem here is that Rhode Island State law heavily regulates gambling, for good reason, and we allege that Kalshi and Polymarket are evading our laws. And Rhode Islanders are losing out. While these private companies continue to profit exponentially off hard-working people, the State’s third largest revenue stream is detrimentally affected, which means less money to fund critical parts of programs that serve Rhode Islanders every day.”
RI Also Cites Kalshi’s Lack Of Problem Gambling Measures
While the core of the lawsuit focuses on event contracts resemblance to Rhode Island sports betting, AG Neronha also pointed out a lack of problem gambling protections that prediction markets offer compared to state-regulated sportsbooks.
He wrote that “Further, we allege that these platforms offer those susceptible to problem gambling unfettered access, increasing the potential for the devastating effects of gambling addiction. We demand Kalshi and Polymarket stand down, abide by our state laws, and disgorge their profits, and this lawsuit is the first step towards that goal.”
Kalshi and other prediction market platforms have been accused of lax regulations and restrictions, most recently when they got shredded in a US Senate meeting on Wednesday. Senators accused Kalshi of advertising to minors on social media and even engaging in a partnership with a 15-year-old.
