Rhode Island's attorney general, Peter Neronha, sued Kalshi and Polymarket this week, accusing both platforms of running sports betting operations that skirt the state's law requiring all sports gambling to go through a single state-sponsored platform. Rhode Island seeks a permanent court order banning the platforms from offering "sports-related events contract" within its borders.

Kalshi beat Rhode Island to the courthouse, filing its own suit arguing that its event contracts, including those predicting sports outcomes, fall under federal jurisdiction and can only be regulated by the US Commodity Futures Trading Commission. Neronha countered in a press release that "there is no substantive difference between sports betting and 'events contract' in this context."

The dual lawsuits mirror legal fights already underway in Nevada and New Jersey, where those states sent cease-and-desist letters to prediction platforms before winding up in court. Minnesota recently passed a bill banning prediction markets, which the CFTC will likely contest. Whatever Rhode Island's court decides could shape how prediction markets operate across every state.