Kalshi sues Iowa Attorney General and State Racing and Gaming Commission

Odaily Planet Daily reports that prediction market Kalshi has filed a lawsuit in Iowa federal court against Iowa Attorney General Brenna Bird and the Iowa Racing and Gaming Commission, claiming there is a “significant risk” of enforcement actions being taken to prevent their event contracts.

Kalshi states that its representatives previously met with Bird, initially believing it was to discuss a tax bill under review by the Iowa legislature. However, during the meeting, a group of lawyers—including the Iowa Deputy Attorney General—questioned whether their federally regulated products violated Iowa law with a series of pointed questions. Kalshi claims Bird told their representatives that the Attorney General’s Office had been “paying close attention” to the company “for a long time.” Afterward, Kalshi contacted the Attorney General’s Office seeking assurance that no enforcement actions would be taken, but received a written response stating that “no guarantees can be made regarding potential future enforcement actions.”

In the lawsuit, Kalshi argues that federal law takes precedence over Iowa law, as their designated contract market is under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). Previously, Kalshi has been involved in legal disputes with sports betting regulators in several states regarding the legality of sports event contracts, with courts issuing mixed rulings: courts in New Jersey and Tennessee have supported Kalshi, temporarily blocking state regulators from taking action; an Ohio federal court dismissed Kalshi’s request earlier this week; and a Massachusetts federal court also prevented Kalshi from offering event contracts in that state earlier this year.