Kalshi files preemptive lawsuit against Iowa regulators… “concerned about potential enforcement action”

Prediction-market platform Kalshi has filed a preemptive lawsuit against regulators in the U.S. state of Iowa, citing a regulatory clash over its sports event contract products.

According to Cointelegraph on the 12th (local time), Kalshi filed suit in federal court in Iowa against Iowa Attorney General Brenna Bird and the Iowa Racing and Gaming Commission, among others. Kalshi argued that Iowa authorities are highly likely to take enforcement action against its event contract products.

In its complaint, Kalshi said regulatory risk increased after a meeting with the Iowa attorney general. Kalshi said, “The Iowa attorney general mentioned that they have been reviewing our company for a long time,” adding, “After that meeting, we concluded there is a substantial risk that the state will move to take enforcement action.”

Kalshi also said it asked the state whether it planned any future enforcement but did not receive a clear answer. Kalshi said it requested confirmation from the Iowa attorney general’s office that there were no enforcement plans, but was told, “We cannot provide any assurance regarding potential future enforcement.”

In the lawsuit, Kalshi contended that its event contract products fall under a contract market regulated by the U.S. Commodity Futures Trading Commission (CFTC). Kalshi stressed that “federal law preempts the application of Iowa’s regulation,” and that regulatory authority over the products lies with the CFTC.