Rhode Island AG Sues Kalshi and Polymarket
State targets prediction market sports contracts as unlicensed gambling in Superior Court filing
Rhode Island Attorney General Peter F. Neronha filed suit Thursday in Rhode Island Superior Court against prediction market platforms Kalshi and Polymarket, alleging their sports event contracts violate state gambling law, according to SBC Americas.
Why It Matters
Rhode Island joins a growing list of states treating CFTC-regulated prediction markets as unlicensed sportsbooks — a legal theory that, if upheld, could fragment the national market for event contracts along state lines. Operators and bettors in regulated sports-wagering states face the most immediate exposure, since those jurisdictions have the clearest financial interest in protecting licensed monopolies or duopolies. A court win for Rhode Island would hand other AGs a usable template, accelerating similar actions. Conversely, a Kalshi or Polymarket victory — both platforms have pursued preemptive federal suits arguing CFTC oversight preempts state law — could settle the jurisdictional question in prediction markets' favor nationwide.
Context
As of May 2026, Kalshi has operated sports event contracts under CFTC oversight since the agency declined to block them, a position Rhode Island and other states contest as insufficient to override state gambling statutes. Polymarket, primarily a crypto-native platform, expanded its U.S. footprint following strong volume during the 2024 U.S. election cycle, per SBC Americas reporting. The Rhode Island suit mirrors earlier actions in New Jersey and other states, forming a coordinated pattern of state-level resistance to federally sanctioned prediction markets.
What's Next
The case proceeds in Rhode Island Superior Court; watch for a motion to dismiss or a federal preemption argument from Kalshi or Polymarket within the next 60–90 days. A parallel federal ruling on preemption — in any of the active suits — could render the state litigation moot or decisive.
Gambling involves financial risk. Regulatory outcomes are uncertain and not predictive of future legal status in any jurisdiction.
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