{"id":74522,"date":"2026-06-25T05:46:39","date_gmt":"2026-06-25T05:46:39","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/cftc-sues-kentucky-to-shield-kalshi-and-polymarket\/"},"modified":"2026-06-25T05:46:39","modified_gmt":"2026-06-25T05:46:39","slug":"cftc-sues-kentucky-to-shield-kalshi-and-polymarket","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/cftc-sues-kentucky-to-shield-kalshi-and-polymarket\/","title":{"rendered":"CFTC Sues Kentucky to Shield Kalshi and Polymarket"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The CFTC sued Kentucky on June 23, its 9th suit against a state over prediction markets since April.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Kentucky is the first Republican-AG state the CFTC has sued; AG Coleman sued Kalshi and Polymarket on June 17.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The suit also challenges Kentucky\u2019s 14.25% tax on prediction-market fees, the first such state levy in the US.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>The first red state in the crosshairs<\/h2>\n<p>The Commodity Futures Trading Commission <a href=\"https:\/\/www.cftc.gov\/PressRoom\/PressReleases\/9260-26\" target=\"_blank\" rel=\"noopener noreferrer\">filed a complaint<\/a> for declaratory and injunctive relief against Kentucky on June 23, asking a federal court to bar the state from enforcing its gambling laws and a new tax against federally regulated <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-are-prediction-markets\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">prediction markets<\/a>. It is the ninth such suit the agency has brought since April \u2013 and, crucially, the first to target a state led by a Republican.<\/p>\n<p>Every prior CFTC suit hit a state with a Democratic attorney general, a pattern critics had flagged. Kentucky breaks the trend: Governor Andy Beshear is a Democrat, but Republican Attorney General Russell Coleman is the one who sued Kalshi and Polymarket on June 17, alleging they run unlicensed sportsbooks. That suit also named Kalshi\u2019s partners Coinbase, Robinhood and Webull as affiliates.<\/p>\n<p>The CFTC\u2019s <a href=\"https:\/\/frontofficesports.com\/trump-administration-backs-kalshi-polymarket-with-lawsuit-against-kentucky\/\" target=\"_blank\" rel=\"noopener noreferrer\">answer<\/a> is the one it has leaned on all year: that sports-event contracts are swaps under the Commodity Exchange Act, placing them under exclusive federal jurisdiction and preempting state gambling law. \u201cKentucky is the latest state attempting to shut down federally-regulated event contracts,\u201d CFTC Chair Michael Selig said, pledging to defend the agency\u2019s \u201cexclusive jurisdiction over <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-are-prediction-markets\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">prediction markets<\/a>.\u201d<\/p>\n<p>The <a href=\"https:\/\/www.cftc.gov\/media\/14271\/OGC_KentuckyComplaint062326\/download\" target=\"_blank\" rel=\"noopener noreferrer\">complaint<\/a> also targets a novel weapon: a 14.25% excise tax on prediction-market transaction fees that Kentucky enacted in April, due to take effect January 1, 2027. The CFTC calls it a barrier designed to make the platforms \u201cimpossible\u201d to operate in the state \u2013 the first tax of its kind in the US. A coalition backing Kalshi, Polymarket and <a href=\"http:\/\/www.bitcoin.com\/get-started\/a-quick-introduction-to-crypto\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">Crypto<\/a>.com had already sued over the levy on June 12.<\/p>\n<p>Coleman was unmoved, vowing his office would defend the state\u2019s betting laws against \u201cout-of-state companies.\u201d The platforms have removed his suits to federal court, betting on a friendlier venue \u2013 the same playbook unfolding in Nevada, where the state is <a href=\"https:\/\/news.bitcoin.com\/kalshis-ip-geofence-still-lets-nevada-users-buy-banned-contracts-as-state-seeks-120000-a-day\/\">trying to fine Kalshi $120,000 a day<\/a>. Roughly 20 states are now in active litigation, former CFTC and SEC chair Gary Gensler has filed an appeals-court brief arguing sports contracts fall outside the agency\u2019s swap rules, and a Supreme Court case is widely expected as soon as next year.<\/p>\n<p>For now, the CFTC is fighting state by state to hold a single national rulebook together. Kentucky shows the fight no longer breaks cleanly along party lines \u2013 and that the platforms\u2019 biggest threat is still a patchwork of states that see a sportsbook where Washington sees a swap.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/cftc-sues-kentucky-to-shield-kalshi-and-polymarket-the-first-republican-led-state-its-targeted\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) The CFTC sued Kentucky on June 23, its 9th suit against a state over prediction markets since April. Kentucky is the first Republican-AG state the CFTC has sued; AG Coleman sued Kalshi and Polymarket on June 17. The suit also challenges Kentucky\u2019s 14.25% tax on prediction-market fees, the [&hellip;]<\/p>\n","protected":false},"author":3947362403,"featured_media":74523,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/74522"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362403"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=74522"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/74522\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/74523"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=74522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=74522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=74522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}