As the trading volume on modern gambling websites like Kalshi and Polymarket continues to skyrocket and gambling addictions surge, a slew of states are filing lawsuits against the sites for violating state laws prohibiting gambling. Experts say the legal actions are an important step in addressing a growing cultural vice that is devastating household budgets and tearing apart families.

On Wednesday, Kentucky Attorney General Russell Coleman (R) announced three lawsuits that the Bluegrass State is launching against three online betting platforms known as “prediction markets” (Kalshi, Polymarket, and VGW) for “operating unlicensed and illegal sports betting and gambling platforms.”

The advent of this new type of gambling platform was precipitated by the Supreme Court’s Murphy v. NCAA decision in 2018, which found that the federal ban on sports betting was unconstitutional. The ruling immediately opened the floodgates for the proliferation of sports betting platforms like DraftKings and FanDuel, but also led to the creation of platforms like Polymarket and Kalshi (in 2020 and 2021, respectively), which allow users to not only bet on sports but to also bet on virtually anything, from the weather to the results of elections and even to when a nuclear attack will occur. This has led to the platforms rebranding themselves as “prediction markets,” where bets have become known as “event contracts.”

Predictably, the vast expansion of betting opportunities that offer online betting 24/7 has led to an unprecedented explosion in online betting. Trading volume on Kalshi and Polymarket has mushroomed from around $5 billion in September 2025 to $24 billion by April 2026. Along with this immense growth has come a surge in gambling addiction, with internet searches seeking help for addiction rising by 23% since 2018, according to a VCU Health study. A gambling helpline in Virginia reported a staggering 1,500% increase in total calls between 2019 and 2024.

States are now taking action to curtail a betting industry that has now become largely unregulated. As Kentucky AG Coleman’s lawsuit makes clear, a rebranded “event contract” betting platform still must abide by state laws that govern sports betting. “Although Kalshi offers so-called ‘event contracts’ on several topics, sports betting made up approximately 70% of its trading volume during a selected sample period in 2025,” Kentucky’s press release noted. “Last year, the platform saw nearly $23 billion in contract volume, 89% of that coming from sports wagering.”

As the press release went on to make clear, “Kalshi and Polymarket are operating illegal sportsbooks” that are not regulated by Kentucky Horse Racing and Gaming Commission and “offer users few or no resources to identify or seek help for a gambling problem, which is mandated under Kentucky law.”

Experts like Dr. John Kindt, who serves as Professor Emeritus of Business at the University of Illinois, point out that Kentucky is far from the only state taking action against illegal activity by prediction markets.

“[T]here are now 16 states which have filed lawsuits against these modernized so-called ‘prediction markets,’ and five of those are red states, 11 of those are blue states,” he detailed during “Washington Watch” Thursday. “[I]t’s a growing problem.”

Kindt went on to detail how prediction market platforms are enabling increased corruption within the government and triggering national security concerns.

“[W]e have people betting in these prediction markets now, which are primarily led by two relatively new companies, Kalshi and Polymarket [that have] got people betting on the Nancy Guthrie abduction … and really disturbing [things like] whether or not nuclear bombs are going to be exploded in the future,” he explained. “And they’re betting on all types of military events, so this becomes a national security issue. And in fact, one of the Polymarket bettors who made $400,000 … was an insider betting on the capture of Maduro in Venezuela [using] military information to profit off of these prediction markets. So they’re totally out of control. They are not regulated, even though the Commodity Futures Trading Commission says that they are. Actually, the CFTC has done a complete 180 and is now promoting these prediction markets. … [H]ere’s an area where the DOJ needs to investigate the leadership of the CFTC.”

Kindt further pointed out that there is growing hunger among voters for candidates who stand for the proper regulation of the gambling industry.

“Two days ago, there was an election in Georgia between the presumed new gubernatorial candidate, Burt Jones, who’s a lieutenant governor. He had the endorsement of President Trump. He had the endorsement of the governor, the sitting governor, and he lost two days ago in a huge upset,” he observed. “He lost to Rick Jackson [who] came out early in the campaign saying, ‘I’m anti-gambling. My opponent has sponsored gambling legislation for the last several years. We’re going to keep this gambling restricted. We’re going to keep many types of gambling out of Georgia, including sports, gambling, casinos, etc.’ Now, Georgia is a purple state, and when an outsider comes in and makes gambling a basis of one of his campaign issues, this is a big deal.”

Kindt concluded by contending that the guardrails recommended by a U.S. commission on gambling almost 30 years ago need to be taken seriously by U.S. lawmakers.

“[T]his is going to sound dramatic, but the guardrails that were recommended by the National Gambling Impact Study Commission … 26 years ago [were] to keep all of this gambling banned,” he emphasized. “… [The CFTC] has misled the economists who are with the Trump administration on this big time. … [W]e just had the Illinois Law Review [publish an article by] 14 blue ribbon professors, both sides of the aisle, … and they say we’re going the wrong way on this gambling. … This is really a serious, serious problem.”