Polymarket and OG Sue Arkansas After State Targets Kalshi

Dek: Two exchanges filed federal challenges five days after Arkansas sued their rival, arguing that federal commodities law prevents the state from treating their contracts as gambling.

Arkansas’ lawsuit against Kalshi has prompted two more prediction markets to take the state to federal court.

Polymarket US and Crypto.com-owned OG.com filed separate lawsuits against Arkansas officials Monday, seeking protection from state gambling enforcement. Both pointed to Attorney General Tim Griffin’s action last week against Kalshi as evidence that their own businesses face an imminent threat.

The filings turn a state enforcement action against one exchange into a broader jurisdictional confrontation. The operators argue that the Commodity Exchange Act gives the Commodity Futures Trading Commission (CFTC) exclusive authority over their contracts, preventing Arkansas from imposing a separate gambling regime.

Two exchanges, two federal districts

Polymarket’s U.S. exchange, QCX LLC, filed QCX LLC v. Griffin et al. in the Western District of Arkansas.

North American Derivatives Exchange, doing business as OG.com Prediction Markets, filed its challenge in the Eastern District of Arkansas. Its complaint names Griffin and seven state racing commission members and seeks declaratory and injunctive relief.

OG’s 59-page complaint argues that federal commodities law displaces Arkansas’s gambling restrictions as applied to its business, even though the state has not taken enforcement action against OG itself.

Kalshi’s lawsuit supplies the enforcement warning

Griffin opened the Arkansas front last week by suing KalshiEX LLC and Kalshi Inc. in Independence County Circuit Court.

The complaint alleges unlawful wagering, misleading statements about legality and safety, violations of the Arkansas Deceptive Trade Practices Act and unjust enrichment. Arkansas seeks an injunction, restitution, civil penalties, unpaid taxes and other relief. Those remain allegations and requested remedies.

“Arkansas law is concerned with substance, not semantics,” Griffin said when announcing the action. His office argues that describing a wager as an event contract does not exempt it from state gambling requirements.

For Polymarket US and OG, the significance is prospective. Arkansas has shown a willingness to pursue a competing federally registered exchange, and it is asking federal judges to intervene before similar action reaches it.

Griffin separately sued sweepstakes casino operator VGW the same day as Kalshi. That case involves a different product and legal defense, but it reinforces the attorney general’s broader effort to challenge businesses he alleges operate outside Arkansas’s gambling rules.

Arkansas adds cases, not a new appellate circuit

Both federal districts sit within the Eighth Circuit Court of Appeals, where the central prediction markets question is already on appeal.

Kalshi’s Iowa case, KalshiEX LLC v. Bird, challenges the denial of preliminary protection against state enforcement. Its opening brief and appendix are due Dec. 7 following an extension.

An eventual Eighth Circuit ruling could influence the Arkansas litigation. But neither new complaint is itself an appellate case, and no ruling from another operator’s dispute automatically grants Polymarket US or OG protection.

The Arkansas filings add two more district-court proceedings to an existing appellate front.

CFTC pressure is increasing while courts remain divided

The lawsuits also arrive days after the CFTC told regulated exchanges to address domestic geographic restrictions.

The agency’s impartial-access interpretation gives exchanges 30 days to cease restrictions that violate its requirements or explain why compliance is not feasible. It also directs them to address restrictions imposed through intermediaries. The interpretation does not vacate existing court orders.

That federal position supports the operators’ argument for nationally accessible markets. It does not settle the courts’ disagreement over whether sports contracts receive the protection they claim.

The Third Circuit sided with Kalshi in New Jersey. The Ninth Circuit ruled against it in Nevada and denied rehearing last week. The Sixth Circuit rejected preliminary protection in the linked Ohio and Tennessee appeals.

Meanwhile, the Second Circuit denied injunctions pending appeal in Kalshi’s New York and Connecticut cases and Coinbase’s Connecticut case without resolving the underlying appeals.

As DeFi Rate’s litigation tracker documents, U.S. Supreme Court petitions remain pending, but none has been granted.