A coalition including Kalshi, Crypto.com, and Polymarket has filed a lawsuit against Kentucky, challenging a 14.25% transaction tax on prediction markets. The tax, enacted by the Kentucky legislature in April, is alleged to be discriminatory, unconstitutional, and preempted by federal law. Kentucky Attorney General Russell Coleman has vowed to defend the tax, asserting it protects state residents from out-of-state companies seeking to undermine Kentucky's sports betting laws.