Svmuu News Prediction market Kalshi has filed a lawsuit in Iowa federal court against Iowa Attorney General Brenna Bird and the Iowa Racing and Gaming Commission, citing a "significant risk" of enforcement action being taken to block its event contracts.
Kalshi stated that its representatives previously met with Bird, initially believing it was to discuss a tax bill under consideration by the Iowa state legislature. However, during the meeting, they were questioned by a group of lawyers, including the Iowa Deputy Attorney General, with a series of pointed questions about whether its federally regulated products violate Iowa state law. Kalshi claimed that Bird informed its representatives that the Attorney General's office had been "watching" the company "for a long time." After the meeting, Kalshi contacted the Attorney General's representatives seeking assurance that no enforcement action would be taken, but received a written response stating they "will not provide any assurances regarding potential future enforcement actions."
In the lawsuit, Kalshi argues that federal law preempts Iowa state law and that, as a designated contract market, it is under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). Kalshi has previously been involved in legal disputes with gaming regulators in multiple states over the legality of its sports event contracts, with varying rulings from federal courts: courts in New Jersey and Tennessee sided with Kalshi, temporarily blocking state regulators from taking action; an Ohio federal court rejected Kalshi's request this Monday; and a Massachusetts federal court earlier this year also blocked Kalshi from offering event contracts in that state.