Multiple institutions jointly sue over Kentucky's 14.25% prediction market tax, Kalshi and Polymarket involved

Odaily Odaily reported that an industry alliance composed of Kalshi, Polymarket and others has filed a lawsuit in court, seeking 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% consumption tax on transaction fees charged by prediction market operators. It is considered the first state-level dedicated tax targeting this industry in the United States. The plaintiff, the "Fair Market Alliance," argues that the tax constitutes a discriminatory measure, violates the Constitution, and may be preempted by federal law. The lawsuit points out that prediction markets are subjected to higher tax burdens, which is clearly unfair and may distort market competition structure. (Abcnews)