Kentucky Attorney General sues Kalshi, Polymarket, and VGW over alleged illegal gambling

Kentucky Attorney General Russell Coleman has filed three lawsuits in Franklin Circuit Court targeting alleged illegal sports betting and online gambling operations in the state.

The lawsuits, filed Wednesday, name prediction market operators Kalshi and Polymarket in two separate actions, while a third complaint targets VGW, the online casino platform operating Chumba Casino, Global Poker, and LuckyLand Slots.

Coleman’s office alleges that Kalshi and Polymarket are offering sports betting in Kentucky without a state gaming license and without complying with Kentucky’s sports wagering regulations. The lawsuits also claim the companies’ advertising gives consumers the false impression that their sports wagering products are authorized under Kentucky law.

“Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws,” Coleman said in a press release. “These multi-billion dollar corporations and their legal fictions don’t pass the sniff test. As one of our state legislative leaders said it best, ‘If it looks like a duck and quacks like a duck…”

The complaints allege violations of Kentucky’s Consumer Protection law, the Loss Recovery Act, and the Commonwealth’s gambling laws. Coleman’s office claims the operators bypass consumer protection and tax requirements that apply to licensed gambling businesses in Kentucky.

The filings also cite responsible gambling concerns. According to Coleman, Polymarket, Kalshi, and affiliated entities including Coinbase, Robinhood, and Webull offer limited or no tools for users to identify gambling-related problems or seek help, despite Kentucky requirements for such safeguards.

In the lawsuits, Coleman wrote that the defendants allow users over 18 to participate after a simple sign-up process, while providing few safeguards related to financial responsibility or the risk of monetary loss.

The lawsuits seek temporary and permanent injunctive relief against Kalshi and Polymarket, along with all recoverable damages available to the Commonwealth.

The separate lawsuit against VGW and its affiliates alleges that the company operates an unlawful sweepstakes casino website using two types of virtual gambling chips. Coleman’s office says the games are designed to resemble traditional casino games, including slot machines and blackjack.

According to the lawsuit, users pay real money for “sweeps coins” used in the games, which Coleman’s office compared to gamblers using poker chips at a casino.

Coleman said his office has a duty to stop illegal gambling in Kentucky regardless of the technology or structure used to offer it. The lawsuit also alleges that VGW presents its sweepstakes casino products to regulators and consumers as harmless video games, while the Commonwealth argues they operate as illegal online casinos. The complaint seeks to recover citizens’ losses and shut down the websites.