Multiple institutions jointly sue Kentucky over 14.25% prediction market tax, involving Kalshi and Polymarket

Odaily reported that an industry coalition consisting of Kalshi, Polymarket, and others has filed a lawsuit in court to block Kentucky's 14.25% transaction tax on prediction markets. The tax, passed by the Kentucky General Assembly in April this year, imposes a 14.25% excise tax on transaction fees charged by prediction market operators, and is considered the first state-level targeted tax on the industry in the United States. The plaintiff, the "Fair Market Coalition," claims the tax is discriminatory, unconstitutional, and may already be preempted by federal law. The lawsuit argues that imposing higher tax burdens on prediction markets is clearly unfair and could distort market competition. (Abcnews)