Rhode Island joins other states that have taken similar legal action.
Rhode Island is the latest state to challenge prediction markets over the legality of sports betting within its jurisdiction. As reported Providence JournalThe state attorney general, Peter Neronha, and Kalushi opposed the lawsuits filed against each other earlier this week. Neronha sued both Kalashi and Polymarket, accusing the platforms of circumventing state regulations that only allow sports gambling through a single state-sponsored platform.
However, Kalshi actively filed its own legal action against Rhode Island and argued that its event contracts, which include predicting the outcomes of sporting events, can only be regulated at the federal level by the US Commodity Futures Trading Commission (CFTC). Nevertheless, Rhode Island’s Attorney General is seeking a permanent court-ordered ban that prevents Kalushi and PolyMarket from offering “sports-related event contracts” in the state.
“There is no significant difference between sports betting and ‘event contracts’ in this context,” Neronha said in a press release. “Kalashi and Polymarket know this, and we know it too.”
While the dual lawsuits only cover legality in Rhode Island, its ultimate decision could set a major precedent on how prediction markets operate in other states. Before the Rhode Island lawsuit, Nevada and New Jersey also sent cease-and-desist letters to prediction market platforms, but ultimately faced similar legal battles. More recently, Minnesota passed a bill that includes a ban on prediction markets operating in the state, which will likely be opposed by the CFTC.
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