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

Odaily Planet Daily reported that an industry coalition comprising 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 this April, imposes a 14.25% excise tax on transaction fees collected by prediction market operators, making it the first state-level tax specifically targeting the industry in the United States. The plaintiffs, the "Fair Market Coalition," argue that the tax is discriminatory, violates the Constitution, and may be preempted by federal law. The lawsuit contends that imposing a higher tax burden on prediction markets is clearly unfair and could distort market competition structure. (Abcnews)