KEY TAKEAWAYS
- Polymarket and Crypto.com’s OG.com filed separate federal lawsuits to block Arkansas from enforcing its gambling laws against their prediction markets.
- Both companies cite Attorney General Tim Griffin’s state court lawsuit against Kalshi as proof that enforcement against them is coming.
- Arkansas sits in the Eighth Circuit, which has not ruled on the preemption question that has split other federal appeals courts.
Polymarket and Crypto.com’s OG.com filed lawsuits Monday against Arkansas following the state’s action against Kalshi last week.
On Monday, the two prediction markets operators sued Arkansas Attorney General Tim Griffin and members of the Arkansas Racing & Gaming Commission in separate federal courts. Both suits ask judges to bar the state from applying its gambling laws to their event contracts.
The filings came five days after Griffin sued Kalshi in state court, calling the market leader a “pocket-sized bookie.” Both Polymarket and OG.com cited that case as evidence to assert they are next.
The race to the courthouse follows a pattern: a state moves against one operator, and others hurry into federal court to pick their own venue and frame the case as federal preemption rather than state gambling enforcement.
A similar situation played out in Missouri this week. Arkansas and Missouri both fall under the Eighth Circuit Court of Appeals, which could become the next major battleground in the fight over who regulates sports event contracts.
OG.com calls threat against it concrete, imminent
North American Derivatives Exchange, the Crypto.com-owned company that does business as OG.com Prediction Markets, filed a 59-page complaint in the U.S. District Court for the Eastern District of Arkansas.
The complaint seeks a declaration that Arkansas gambling laws are preempted as applied to OG.com, plus a permanent injunction against enforcement. It makes three familiar claims: express, field and conflict preemption under the Commodity Exchange Act.
The company built its standing argument on the Kalshi suit, Griffin’s public statements and the state’s amicus briefs in seven federal appeals courts.
“Consistent with the Kalshi Enforcement Action and Defendants’ public statements evincing an intent to attempt to enforce Arkansas gambling laws against federally regulated exchanges, Defendants will take the same action against OG.com,” the complaint reads.
Polymarket’s U.S. exchange, QCX LLC, filed in the Western District of Arkansas. Polymarket seeks declaratory and injunctive relief against expected enforcement, arguing that federal law gives the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over event contracts.
Griffin targeted Kalshi, VGW last week
Griffin filed against Kalshi last week. The suit brings three counts under the Arkansas Deceptive Trade Practices Act and one for unjust enrichment.
The complaint accuses Kalshi of opening accounts to users as young as 18 without the licenses, oversight or taxes that Arkansas requires of legal gambling operators. It also cited Kalshi’s partnership with the National Council on Problem Gambling, along with its self-exclusion and deposit-limit tools, as evidence that the company knows its product is gambling.
The same day, Griffin sued sweepstakes operator VGW. He called the company’s dual-currency defense “too-cute-by-half” logic that courts repeatedly reject. Both Kalshi and VGW rejected the allegations last week in comments to SBC Americas.
The lawsuits followed an October 2025 formal opinion in which Griffin concluded that platforms like Kalshi offer illegal gambling without a state license.
Courts remain split on preemption argument
The Arkansas cases join an ever-expanding list of lawsuits over prediction markets across 30 states and Washington, D.C., and a journey likely headed to the U.S. Supreme Court.
Federal appeals courts disagree on the issue:
- Third Circuit: ruled for Kalshi in New Jersey in April
- Ninth Circuit: ruled against Kalshi in Nevada in August and denied rehearing on Nov. 4
- Sixth Circuit: ruled against Kalshi in the consolidated Ohio and Tennessee cases in September
- Second Circuit: denied Kalshi and Coinbase injunctions pending appeal in New York and Connecticut earlier this month
The Eighth Circuit has not ruled. Kalshi’s opening brief in its Iowa appeal is due Dec. 7.
Three cert petitions sit with the Supreme Court, including from New Jersey.
CFTC continues to push its jurisdiction
The CFTC continues to escalate on the operators’ side. It sued nine states and won a preliminary injunction against Illinois on Oct. 30.
It also proposed a rule last month defining sports, political and cultural event contracts as swaps, and issued an interim rule excluding casino-style gambling from that definition.
Last week, CFTC Chairman Michael Selig told exchanges to end geographic restrictions.
