Rhode Island and Kalshi file dueling lawsuits over sports event contracts
Rhode Island and Kalshi filed dueling lawsuits over sports event contracts, with the state suing both Kalshi and Polymarket in state Superior Court while Kalshi separately challenged Rhode Island's stance. Rhode Island alleges the platforms' contracts function like traditional sports betting and violate state gambling laws, potentially harming state betting revenue. Kalshi's suit advances a federal preemption argument that its contracts are federally regulated derivatives. The filings, reported May 24-26, extend a pattern of mutual litigation: Kalshi also sued Minnesota on May 28 after that state enacted a ban on prediction markets, replacing earlier provisions with a prohibition. Separately, Wisconsin's Department of Justice has sued Kalshi over alleged illegal sports betting, and four New Mexico tribes have challenged Kalshi on tribal land issues. Kalshi and Polymarket recently lost bids to move state gambling suits to federal court in Washington and Nevada, where state regulators had sued both platforms.
Any Rhode Island state-court ruling that classifies Kalshi's sports contracts as gambling arms regulators in Ohio, Pennsylvania, Wisconsin, and Minnesota with binding precedent to force geofencing or block operations. Kalshi's federal preemption defense now faces simultaneous tests in Rhode Island, Minnesota, and the tribal cases.
Rhode Island and Minnesota become the fifth and sixth state-level actions against Kalshi in under three weeks, after parallel suits and regulatory fights in New Mexico, Wisconsin, Tennessee, Ohio, Pennsylvania, Washington, and Nevada.