Rhode Island Attorney General Sues Kalshi and Polymarket

According to The Providence Journal, Rhode Island Attorney General Peter Neronha is suing Kalshi and Polymarket, two of the biggest prediction market platforms. He's accusing both of conducting illegal sports betting. 

Following a state lottery investigation into prediction markets in March, the Journal says that the lawsuit "was not unexpected." It also mentioned that neighboring Massachusetts took action against prediction markets, which included a top court in the Commonwealth appearing open to banning Kalshi, per Reuters. 

The suit filed by Neronha seeks an injunction barring both sites from accepting sports wagers. 

With prediction markets, players can trade on the outcomes of events, whether that's cryptocurrency, politics, weather, or even sports.

However, Neronha is arguing that the prediction market model is "using different terms to get around the lottery-controlled sports betting system set out in state law," the Journal said. 

Rhode Island Claims Prediction Markets Mirror Sports Betting

"There is no substantive difference between sports betting and ‘events contracts’ in this context; Kalshi and Polymarket know that, and we know that," Neronha said in a news release. "The problem here is that Rhode Island State law heavily regulates gambling, for good reason, and we allege that Kalshi and Polymarket are evading our laws."

With prediction markets offering this, one could argue it's eating into the revenue of the current state system, which is Sportsbook RI.

Finally, the suit discussed how these sites could contribute to problem gambling. 

Lawsuits Against Prediction Markets Continue Growing

This news comes after several New Mexico pueblos filed a lawsuit against Kalshi, alleging that it violates tribal gaming laws. 

There have been many other lawsuits, including those from a Wisconsin tribe, three California tribes, and many more.