Overview
- Kalshi sued Rhode Island officials in federal court seeking declaratory relief and injunctions after a May 20 meeting, arguing its CFTC‑regulated event contracts are federally governed derivatives.
- Rhode Island Attorney General Peter F. Neronha filed a state-court suit on May 22 alleging Kalshi and Polymarket offered unlicensed sports betting and seeking disgorgement for lost lottery revenue and consumer-protection relief.
- A three‑judge Ninth Circuit panel denied emergency stays for Kalshi and Polymarket on May 22, ruling that a Commodity Exchange Act preemption defense does not by itself create federal jurisdiction and allowing Nevada and Washington cases to proceed in state courts.
- The decisions deepen a split among federal courts—some recent rulings have sided with platforms while others have opened the door to state enforcement—which raises the chance the issue will reach the Supreme Court or prompt legislative action.
- For users and platforms the immediate effects are clear: states could bar or limit sports-related contracts, require state gaming licenses, or pursue disgorgement and criminal charges in some jurisdictions, while companies face simultaneous state defenses and federal appeals.