Overview
The platforms’ own challenge to Kentucky’s prediction-market laws. The Coalition for Fair Markets — a Virginia trade association whose members are Kalshi, Crypto.com’s exchange and Polymarket US — sued in Franklin Circuit Court on June 12, 2026, five days before the Attorney General sued Kalshi and Polymarket. It targets two things: the 14.25% excise tax on prediction-market transaction fees (H.B. 757, effective January 1, 2027), which reaches Kentucky residents’ trades wherever they are made, and the bar on state gaming licensees contracting with prediction markets that offer sports contracts (H.B. 904, as amended by H.B. 869, effective July 15, 2026). It pleads five claims: preemption by the Commodity Exchange Act, the dormant Commerce Clause, the First Amendment, and the Kentucky Constitution’s equal-protection and special-legislation clauses. It contrasts the 14.25% rate with the 9.75% tax on wagers at horse tracks.
The fight has since moved to federal court. On July 27 the Coalition moved, unopposed, to intervene in the United States’ suit against Kentucky, attaching this complaint; the motion said it would ask the state court to stay this case meanwhile. Judge Meredith granted intervention on August 10, and the Coalition’s summary-judgment motion there is set for argument October 9. Kentucky sits in the Sixth Circuit, which rejected the platforms’ preemption theory on September 25 — the Coalition’s Commerce Clause, First Amendment and state-constitutional claims do not depend on it. (Caption, court, judge, filing date, members and claims read from the file-stamped complaint, filed as Ex. B to E.D. Ky. ECF 18; whether the state court has entered a stay is not confirmed.)