New Delhi, June 26 -- FRANKFORT - The lawsuit arrived at the federal courthouse six days after Kentucky had filed its own.

Attorney General Russell Coleman's office had moved first, filing three separate cases in Franklin Circuit Court on June 17 and 18, targeting prediction market platforms Kalshi and Polymarket and sweepstakes casino operator VGW Holdings for what Coleman called illegal sportsbooks operating without state licenses. "Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws," Coleman said. The companies argued that holding federal designations made them untouchable under state gambling statutes.

Then the Commodity Futures Trading Commission answered. On June 23, according to the CFTC's f...