KY ยท Checked Oct. 21, 2026
Prediction market law in Kentucky
In litigation
Kentucky's attorney general is suing Kalshi and Polymarket's U.S. exchange, operators are challenging a new 14.25% prediction-market tax, and the CFTC is suing Kentucky; no court order restricts any platform.
Attorney General Russell Coleman filed separate Franklin Circuit Court suits on June 17, 2026 against Kalshi and against QCX LLC, the exchange behind Polymarket US, alleging unlicensed sports betting. Both were removed to federal court, and the state is seeking remand; on Oct. 14, 2026 a magistrate judge recommended sending the Polymarket case back to state court. Earlier, the legislature overrode the governor's veto of HB 757, which imposes a 14.25% tax on prediction market operators' transaction fees from Jan. 1, 2027, and a coalition including Kalshi, Crypto.com and Polymarket sued in state court on June 12, 2026 to block it. On June 23, 2026 the CFTC sued Kentucky over its enforcement suits and the new levy. That case has no merits ruling; an October argument was canceled and supplemental briefs are due Oct. 23, 2026.
Timeline of state actions
Other development, Polymarket US
Magistrate Judge Edward B. Atkins recommended granting Kentucky's motion to send its QCX case back to state court; the district judge has not yet ruled.
Source: DeFi Rate tracker sources page
Other development
Judge S. Chad Meredith canceled the Oct. 9, 2026 argument in the CFTC case and ordered supplemental briefs, due Oct. 23, 2026, on the Sixth Circuit's Schuler decision and pending CFTC rulemaking.
Source: DeFi Rate tracker sources page
Other development, Kalshi
Kentucky filed its reply supporting remand of the Kalshi case to state court before Judge Robert E. Wier (E.D. Ky. No. 3:26-cv-00048); no ruling was found.
Other development
The United States and the CFTC sued Kentucky in federal court, arguing that state enforcement suits against CFTC-registered exchanges and a new state fee on them are preempted.
Source: CFTC press release 9260-26
Other development, Polymarket US
Polymarket removed the Commonwealth's QCX case to the U.S. District Court for the Eastern District of Kentucky (No. 3:26-cv-00047); Kalshi removed its case in June as well (No. 3:26-cv-00048).
State lawsuit, Kalshi, Polymarket US
The attorney general filed separate Franklin Circuit Court suits against KalshiEX LLC and others (No. 26-CI-00689) and QCX LLC and others (No. 26-CI-00696), alleging unlicensed sports betting.
Source: The Block
Operator lawsuit, Kalshi, Crypto.com, Polymarket
A coalition including Kalshi, Crypto.com and Polymarket sued in state court to block the 14.25% prediction-market tax, calling it discriminatory and preempted.
Source: KTAR (AP)
Laws and bills
HB 757 (2026), amended by HB 869EnactedApril 2026
Excise tax on prediction market operators
Imposes a 14.25% excise tax on prediction market operators' transaction fees, including amounts consumers pay for event contracts, effective Jan. 1, 2027; enacted over the governor's veto and challenged in court by operators and the CFTC.
Source: fbtgibbons.com