Published
June 30, 2026
Updated
July 2, 2026
The suit asks a federal court to treat Kalshi's event contracts as illegal gambling in Kentucky — and to make Kentuckians' losses recoverable under KRS 372.020.
Allegations Only · No Settlement Yet
This article describes a class action complaint. The statements below are unproven allegations. Kalshi has not been found liable, there is no certified class, and nothing to claim at this time. This page is informational and is not legal advice.
What Is This About?
A proposed statewide class action accuses Kalshi of running illegal, unlicensed gambling in Kentucky through its online "prediction market." The complaint, Roberts v. Kalshi, Inc. (Case No. 3:26-cv-336-GNS, U.S. District Court for the Western District of Kentucky, Louisville Division), was filed on May 11, 2026 by a Jefferson County resident on behalf of Kentucky users of Kalshi.com.The complaint alleges that what Kalshi markets as federally regulated "event contracts" are, in substance, ordinary bets on the outcomes of elections, sports contests, the weather, and other events — and that offering them to Kentucky residents without obtaining a state sports-wagering license violates Kentucky law. It seeks to recover class members' losses under Kentucky's gambling-loss recovery statute, KRS 372.020. Kalshi has not responded to the complaint, and the allegations are unproven.
Status
Complaint Filed · May 11, 2026
Roberts v. Kalshi · U.S. District Court, W.D. Kentucky (Louisville Division)
Core Allegation
Kalshi's "prediction market" = unlicensed illegal gambling
Brought under Kentucky's gambling-loss recovery statute, KRS 372.020
Proposed Class
Kentucky residents who lost more than $5 in any 24-hour period on Kalshi
Losses during the five years before the complaint was filed
Can I Claim?
No — nothing to claim yet
No settlement, no fund, no claim form; class not certified
What Is Kalshi's "Prediction Market"?
Kalshi operates an online exchange where users buy and sell "event contracts" tied to whether a specific event will happen — for example, who will win an election, a tennis match, or a football game. Each contract is a "Yes" or "No" position priced between one cent and 99 cents, where the price is meant to reflect the market's estimate of the probability; if the position matches the outcome, the contract pays out $1, and if not, it expires worthless.The complaint alleges that Kalshi has moved well beyond simple "Yes/No" event questions and now offers contracts that mirror traditional sports wagers — including point spreads, total combined points, and player prop bets such as how many yards or touchdowns a player will record. It alleges that, stripped of the financial-markets language, these sports contracts are functionally identical to bets offered by sportsbooks, and that a platform offering them without a state gambling license is no different from an unlicensed sportsbook.
The suit also names Susquehanna International Group, LLP and Susquehanna Government Products, LLLP, alongside Kalshi's trading affiliate, alleging they act as "market makers" that set the prices on Kalshi's exchange by buying contracts they consider undervalued and selling those they consider overvalued. The complaint characterizes this role as essentially that of a bookmaker. The Susquehanna entities have not responded to the complaint, and these allegations are unproven.
Why the Plaintiff Says It's Illegal Gambling in Kentucky
Kentucky heavily regulates gambling and prohibits unregulated gambling within its borders. Sports wagering is legal only in narrow, licensed circumstances overseen by the Kentucky Horse Racing and Gaming Corporation; under KRS 230.260, any entity offering advance-deposit wagering to Kentucky residents must be licensed by the corporation, and service providers must apply for a license and pay a fee under 809 KAR 1:002.The complaint alleges that Kalshi has made no effort to comply with these requirements or to obtain a Kentucky license, yet continues to accept money from Kentucky bank accounts and cards to place wagers. It contends that Kalshi's "futures," "swaps," and "options" labels are wordplay, and points to rulings in which courts have rejected similar characterizations and treated the activity as gambling — citing KalshiEX, LLC v. Schuler, No. 2:25-cv-1165 (S.D. Ohio, Mar. 9, 2026). Kalshi, for its part, has maintained that its event contracts are regulated under the federal Commodity Exchange Act and overseen by the Commodity Futures Trading Commission. Which view prevails is exactly what the litigation will test.
What Is KRS 372.020?
Kentucky backs up its prohibition on illegal gambling with a statute that lets losers recover their money. KRS 372.020 provides that if a person loses $5 or more to another at one time, or within a 24-hour period, the loser (or, in some circumstances, their creditors) may recover the money or its value from the winner or a transferee, by an action brought within five years of the loss.The complaint relies on this statute to seek recovery of Kentucky residents' net losses on Kalshi — the amounts wagered and lost, minus any winnings actually paid back. Because the statute is designed to deter gambling by making losses recoverable, the lawsuit argues it applies squarely to money Kentuckians lost on what it calls Kalshi's illegal gambling platform.
Who Is Covered by the Proposed Class?
The complaint seeks to certify a class under Rule 23(b)(3) defined as:All Kentucky residents who lost more than $5 during any 24-hour period on Kalshi's website or app during the five years preceding the filing of the complaint, continuing to a date set by the court. Employees of the court, the plaintiff's counsel, and their families are excluded.
The complaint estimates the class includes thousands of Kentucky residents and argues that the individual losses are documented in Kalshi's own records, which it says will allow class members and their losses to be identified in discovery. No class has been certified yet, so the definition and eligibility could change as the case proceeds — or the case could be dismissed.
What the Lawsuit Seeks
The complaint brings a single class claim under KRS 372.020 and asks the court to:• Certify the case as a class action and appoint the named plaintiff as class representative and his attorneys as class counsel.
• Enter judgment against Kalshi for a refund of the class members' net losses on the platform during the statutory period.
• Award class counsel reasonable attorneys' fees and expenses from any common-fund judgment, plus a service award for the named plaintiff.
• Award interest, costs, and any other relief the court finds appropriate.
All of these are requests for relief tied to unproven allegations; Kalshi has not been found to have done anything unlawful, and no money has been awarded.
Is There a Settlement or Claim Form?
No. This is a freshly filed lawsuit, not a settlement.That means:
• There is no settlement fund.
• There is no claim form.
• There is no payout and no deadline to act.
For any money to be distributed, the case would first have to survive Kalshi's expected motions, then win class certification, and then either settle or prevail — a process that can take years and may not succeed. Be cautious of any website that claims you can "file a claim" against Kalshi over Kentucky losses today. If a class is ever certified and a settlement or judgment results, a formal process with its own eligibility rules and deadlines would be announced separately.
The Bigger Picture
The Kentucky case is part of a widening fight over whether prediction-market "event contracts" are financial products or gambling. State regulators have sent cease-and-desist letters to Kalshi and similar platforms, courts in several states have weighed in, and parallel proposed class actions make similar gambling-loss arguments elsewhere — the Kalshi Oregon gambling-loss class action seeks double damages under ORS 30.740, and Mazza v. Robinhood targets Robinhood's Prediction Markets Hub. For background on the broader wave of suits and regulatory actions targeting Kalshi, see our overview of Kalshi's prediction-market legal challenges and the separate Kalshi v. Illinois preemption fight over SB 3019. The outcome of cases like this one could help decide how the entire industry is regulated.Read the Complaint
You can read the full Kentucky class action complaint below:Roberts v. Kalshi — Statewide Class Action Complaint (PDF, May 11, 2026)
Frequently Asked Questions
Is there a Kalshi Kentucky settlement or claim form?
No. This is a newly filed class action complaint, not a settlement. There is no settlement fund, no claim form, and no payout. Kalshi has not been found liable, no class has been certified, and there is nothing to claim at this time.What does the Kalshi Kentucky lawsuit allege?
That Kalshi's "prediction market" is, in substance, illegal and unlicensed gambling, and that by letting Kentucky residents bet real money on events such as sports outcomes without complying with Kentucky's sports-wagering regulations, Kalshi violated state law. It seeks to recover class members' losses under Kentucky's gambling-loss recovery statute, KRS 372.020. These are unproven allegations.Who could be covered by the proposed class?
The complaint proposes a class of Kentucky residents who lost more than $5 during any 24-hour period on Kalshi's website or app during the five years before the complaint was filed. No class has been certified, so coverage could change as the case proceeds — or the case could be dismissed.What is KRS 372.020?
KRS 372.020 is Kentucky's gambling-loss recovery statute. It lets a person who loses $5 or more to gambling within any 24-hour period sue to recover that money from the winner or a transferee, by an action brought within five years of the loss. The complaint relies on this statute to seek recovery of Kentucky residents' net losses on Kalshi.Sources
• Roberts v. Kalshi, Inc. — Statewide Class Action Complaint, No. 3:26-cv-336-GNS (W.D. Ky., filed May 11, 2026)• Court records — KalshiEX, LLC v. Schuler, No. 2:25-cv-1165 (S.D. Ohio, Mar. 9, 2026).
• Kentucky Revised Statutes — KRS 372.020 (gambling-loss recovery) and KRS 230.260 (licensing of sports wagering).
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Status
Complaint Filed — Allegations Only
Case Title
Roberts v. Kalshi, Inc.
Case Number
3:26-cv-336-GNS
Court
U.S. District Court, W.D. Kentucky (Louisville Division)
Date Filed
May 11, 2026
Defendants
Kalshi, Inc.; KalshiEX LLC; Kalshi Klear entities; Kalshi Trading LLC; Susquehanna International Group, LLP; Susquehanna Government Products, LLLP
Official Court Source
Read the Complaint (PDF)
