Polymarket and OG.com sue Arkansas officials in separate federal cases

Polymarket and Crypto.com's OG.com each filed a federal lawsuit against Arkansas on 9 November, seeking court orders that would stop the state enforcing its gambling laws against their event contracts. Arkansas Attorney General Tim Griffin and members of the Arkansas Racing & Gaming Commission are the named defendants. The cases could matter to operators and affiliates working with prediction market products.

What happened

According to SBC Americas, the companies went to separate federal courts. North American Derivatives Exchange, Inc., which trades as OG.com Prediction Markets and is owned by Crypto.com, lodged a 59-page complaint in the Eastern District of Arkansas. QCX LLC, Polymarket's US exchange, brought its case in the Western District of Arkansas.

It sets out express, field and conflict preemption claims under the Commodity Exchange Act. The filing describes OG.com as a designated contract market regulated by the CFTC, and argues that Congress gave the CFTC exclusive jurisdiction over such markets and the products they list.

Both companies point to the case Arkansas brought against Kalshi, filed in Independence County Circuit Court on 4 November. OG.com's complaint says that, given that action and the defendants' public statements, the defendants will take the same step against it.

SBC Americas reports that the Kalshi suit has three counts based on the Arkansas Deceptive Trade Practices Act, plus one count of unjust enrichment. Griffin also sued sweepstakes operator VGW the same day. Kalshi and VGW both rejected the allegations, SBC Americas reported.

Why it matters

The cases could shape whether state gambling regulators or the CFTC set the terms for event contracts in Arkansas.

A similar situation played out in Missouri, which also sits in the Eighth Circuit. Arkansas and Missouri could become a significant test.

In September the Second Circuit denied injunctions pending appeal to Kalshi and Coinbase in the New York and Connecticut matters. The CFTC also proposed a rule defining sports, political and cultural event contracts as swaps, and how that rule develops could matter to operators.

Operators and affiliates working with event contracts in Arkansas may need to check how their products are classified and whether state or federal rules are being relied on in their compliance reviews. Suppliers and payment providers could face questions over processing flows if enforcement proceeds. Any promotion of event contracts in the state is likely to need careful legal review while the outcome remains open.

What's next

Kalshi's opening brief in its Iowa appeal is due on 7 December, according to SBC Americas.