Rhode Island Attorney General Peter Neronha has filed a lawsuit against Kalshi and Polymarket in Superior Court, alleging both operators are “evading” state laws despite adopting the “design and terminology of traditional gambling operations.”
Neronha claims there is “no substantive difference” between sports betting and event contract trading, and is currently seeking a permanent injunction against the prediction market operators.
“There is no substantive difference between sports betting and ‘events contracts’ in this context; Kalshi and Polymarket know that, and we know that. The problem here is that Rhode Island State law heavily regulates gambling, for good reason, and we allege that Kalshi and Polymarket are evading our laws. And Rhode Islanders are losing out,” Neronha said.
“While these private companies continue to profit exponentially off hard-working people, the state’s third largest revenue stream is detrimentally affected, which means less money to fund critical parts of programs that serve Rhode Islanders every day.
“Further, we allege that these platforms offer those susceptible to problem gambling unfettered access, increasing the potential for the devastating effects of gambling addiction. We demand Kalshi and Polymarket stand down, abide by our state laws and disgorge their profits, and this lawsuit is the first step towards that goal.”
The Rhode Island Attorney General is also seeking a declaration which requests Kalshi and Polymarket’s offerings be deemed as “gambling,” “casino gaming” and “online sports wagering,” while falling under the state Lottery’s regulation.
According to the Rhode Island Lottery, the “impact from the expansion of prediction markets” led to an 8% decrease in total betting handle from 2024 to 2025.
Polymarket recently expanded its prediction market offering with new contracts tied to private company milestones, including valuations, IPO timing and secondary-market activity.
The operator has listed markets connected to companies including OpenAI and Anthropic, giving users a way to trade on private-market events without owning shares, voting rights or equity exposure.
Following approval for an online sports wagering vendor license by the Rhode Island Lottery on May 15, Bally’s will launch its online sportsbook once an exclusivity period held by IGT ends in November
