Odaily Planet Daily reports that the prediction market Kalshi has filed a lawsuit in federal court in Iowa against Iowa Attorney General Brenna Bird and the Iowa Racing and Gaming Commission, citing a "significant risk" of enforcement action to block its event contracts.
Kalshi stated that its representatives previously met with Bird, expecting to discuss a tax bill under consideration by the Iowa state legislature, but were instead questioned by a group of attorneys—including Iowa’s deputy attorney general—about whether its federally regulated products violated Iowa state law. Kalshi said Bird had informed its representatives that the attorney general’s office had been “monitoring” the company “for a long time.” After the meeting, Kalshi contacted the attorney general’s office seeking assurance that no enforcement action would be taken, but received a written response stating, “We cannot provide any assurance regarding potential future enforcement actions.”
Kalshi argues in its lawsuit that federal law preempts Iowa state law, as it is a designated contract market subject to the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). Previously, Kalshi has been involved in legal disputes with gambling regulators in multiple states over the legality of sports event contracts, with inconsistent rulings from state federal courts: courts in New Jersey and Tennessee have supported Kalshi, temporarily blocking state regulators from taking action; the Ohio federal court rejected Kalshi’s request this past Monday; and the Massachusetts federal court earlier this year also blocked Kalshi from offering event contracts in that state.