Two New Arkansas Lawsuits Expand Prediction Markets Dispute With US States
Key Facts
The US dispute over regulation of prediction markets widened on November 9, 2026, as Polymarket and Nadex, owned by Crypto.com and operating as OG.com, filed separate lawsuits against Arkansas officials, according to reports on the cases. QCX LLC, the operator of Polymarket US, filed a federal case against state Attorney General Tim Griffin in the US District Court for the Western District of Arkansas. A report at the time of publication said the complaint was not publicly available, so details of the company’s claims and the form of relief it sought could not be confirmed. In Missouri, Robinhood and Polymarket sued state officials, while the available facts do not establish that Robinhood or Crypto.com sued both states. The companies argue that event contracts fall under a federal framework, but that remains a legal position in the lawsuits, and no ruling has resolved it in these cases.
The federal lawsuits in Arkansas followed Griffin’s November 4, 2026, suit against Kalshi in state court, brought under Arkansas’s Deceptive Trade Practices Act. The state case thus preceded Polymarket’s and Nadex’s actions by five days, and the dispute now involves two different court tracks in the state. The developments show that the confrontation is not limited to a dispute over how a particular product is classified; it also concerns which authority has the power to oversee it and enforce rules. Prediction platforms say federal agencies regulate their activity, while states view some contracts as falling within the scope of local gambling laws. For the companies, the practical question is whether they can continue offering contracts tied to event outcomes to customers in states that consider them unlicensed gambling.
Robinhood frames its argument around the role of a broker: it says event contracts are offered through Robinhood Derivatives and through its membership in partner exchanges regulated by the US Commodity Futures Trading Commission. That description bolsters the company’s argument that the activity is tied to the infrastructure of federal derivatives markets, rather than an independent local betting platform. Prediction platforms generally argue that states lack authority to regulate them because they are subject to the Commodity Futures Trading Commission. States, by contrast, characterize some contracts as gambling, while the platforms say consumers trade contracts with one another tied to the probability of an event outcome, in a way similar to buying and selling assets in markets. The distinction between those two characterizations remains at the heart of the dispute, with federal appeals courts reaching different outcomes so far.
The Third Circuit Court of Appeals backed Kalshi’s position, while the Sixth and Ninth Circuits backed states seeking to regulate prediction markets, according to the Associated Press. The split means courts have not settled on a unified approach to whether federal law bars states from applying gambling laws to event contracts. These divergent paths increase the significance of the new cases in Missouri and Arkansas, which could add further rulings on the scope of federal and local jurisdiction to the dispute. In the debate over the scale of activity, the National Football League told the Supreme Court in a brief that trading tied to the league totaled $1.8 billion out of $3.3 billion on the first Sunday of the season. The league cited those figures in asking the court to resolve the question of prediction-market regulation.
The Commodity Futures Trading Commission is also in a legal confrontation with states, defending its federal jurisdiction. On October 27, 2026, the commission announced that it had sued Utah to prevent the state from using its laws to shut down markets for contracts registered with the agency, and said it had legal proceedings against nine other states. It added that it had filed briefs before four federal appeals courts and one state supreme court. Commission Chairman Michael Selig said event contracts “serve not only hedging and investment purposes, but also provide the public with information about the outcomes of future events.” Robinhood shares closed at $83.32 on November 9, according to EL7 data; the data do not establish a link between the closing price and the lawsuits or the expansion of the company’s services.