Kalshi sues Iowa officials claiming federal authority over prediction market contracts

A federally regulated prediction market is taking Iowa officials to court, arguing the state is threatening to crack down on trading activity that federal law already oversees.

Kalshi, a New York–based derivatives exchange, filed a complaint in the U.S. District Court for the Southern District of Iowa asking a judge to stop potential enforcement by the state. The company says Iowa’s attorney general and the Iowa Racing and Gaming Commission are trying to regulate financial event contracts that fall under federal authority.