Kentucky sues Kalshi and Polymarket, pushing users toward VPNs for access
The state of Kentucky has officially joined a widening multi-state legal battle, launching a sweeping lawsuit against major prediction markets Polymarket and Kalshi, as well as mainstream brokerage partners Coinbase, Robinhood, and Webull. The move marks a massive regulatory escalation against the platforms over their offering of sports event contracts.
According to the lawsuit filed in state court by Kentucky Attorney General Russell Coleman, the state accuses the firms of operating "unlicensed and illegal sports betting and gambling platforms". While the legal proceedings are just beginning and the platforms remain technically accessible to residents today, the aggressive push has triggered a sharp rise in regional interest for Virtual Private Networks (VPNs) as traders prepare for imminent geoblocking.
Why Kentucky is targeting prediction markets
Kentucky authorities argue that event contracts tied directly to sports outcomes fall squarely under the legal definition of "sports wagering" under state law. Because the platforms do not hold state-level gaming licenses, local regulators claim they are bypassing essential consumer protections and missing mandated problem-gambling mitigation efforts.
Kentucky is far from alone in its approach. At least 17 other US states have pursued similar actions against the platforms:
- States that have issued cease-and-desist orders: Montana, Nevada, Utah, Iowa, Illinois, Ohio, Tennessee, New York, New Jersey, Connecticut, and Maryland.
- States pursuing direct lawsuits: Washington, Arizona, New Mexico, Wisconsin, Michigan, Massachusetts, and now Kentucky.
The legal dispute centers on a massive definition clash: states view these trades as unlawful sports gambling, while platforms and the federal Commodity Futures Trading Commission (CFTC) argue they are swaps governed exclusively under federal commodities law.
Why people use VPNs for prediction markets
As regional bans and state-level lawsuits fragment the internet, thousands of traders rely on VPNs to retain their access. A VPN, or Virtual Private Network, works by routing your internet connection through a server located in a different city or country. When you connect to a VPN server in, say, Montreal or London, the prediction market platform sees that server's IP address instead of your real one. From the platform's perspective, you appear to be accessing the site from a permitted location.
The basic process looks like this:
Beyond location masking, VPNs also encrypt all traffic between your device and the VPN server, which means your internet provider cannot see which sites you are visiting.
- Overriding location blocks: Prediction platforms use automated software to look up a user’s incoming Internet Protocol (IP) address. If a user connects from an active litigation zone like Kentucky or Michigan, the site throws up a digital wall. A VPN completely masks the user's native IP and swaps it with one belonging to a server in an allowed zone - such as New Jersey or an international location.
- Ensuring data privacy: All web traffic moving through the VPN is encrypted. This prevents local Internet Service Providers (ISPs), public Wi-Fi sniffers, and network administrators from tracking which trading platforms or web applications are being utilized.
Can a VPN actually get you into Polymarket or Kalshi?
The honest answer in 2026 is: sometimes, depending on the VPN and the server you choose - but it is getting harder on Polymarket specifically.
Polymarket has actively begun blocking IP ranges associated with known VPN providers. The platform has also started flagging accounts with unusual connection patterns and requesting KYC (Know Your Customer) identity verification for high-volume traders or accounts that trigger location-inconsistency alerts. Polymarket's own help documentation explicitly states that use of VPNs to bypass geographic restrictions violates its terms of service.
Kalshi, as a CFTC-regulated US exchange, operates differently — it requires ID verification upfront, so the enforcement model is based on who you are, not just where your IP address appears to be.
Best VPNs that still work for Polymarket
Cybernews hands-on testing confirms that only premium providers using heavily obfuscated, randomized, or residential server infrastructure successfully evade these deep packet inspection blocks.
| VPN for Polymarket | Rating | Why it's recommended | Note | Price |
| 1. NordVPN | Overall best VPN for Polymarket and Kalshi | Connecting to a Montreal, Canada server has worked in recent tests. NordVPN's obfuscated servers help disguise VPN traffic, making it harder to detect. | $3.49/month | |
| 2. Surfshark | Best budget option | Worked via Montreal, Canada in tested configurations, with consistent performance during access windows. | $2.49/month | |
| 3. Proton VPN | Secure VPN with a free version | Showed successful access when connected through an Albanian server, offering an alternative route for users blocked by North American-focused filters. | $2.99/month |
Which states are most at risk - and where VPNs help most
The legal landscape varies significantly by state:
- Kentucky - active AG lawsuits filed June 17, 2026; access at risk
- Arizona - cease-and-desist issued; CFTC counter-sued the state
- Connecticut - cease-and-desist issued; CFTC counter-sued the state
- Illinois - cease-and-desist issued; CFTC counter-sued the state
- New Jersey - Kalshi won federal court ruling; access clearer
- California & Texas - advertising concerns raised; no formal block yet
Users in the four states where active legal disputes are ongoing - Kentucky, Arizona, Connecticut, and Illinois - face the most immediate uncertainty. In these states, a VPN offering a server location in a less contested jurisdiction (another country or a state with no restrictions) is the most practical short-term option for continued platform access.
The important caveats
Using a VPN to access a platform in a jurisdiction where it has been declared illegal or unlicensed is not without risk. Kentucky's lawsuits target the companies, not individual users, but violating a platform's terms of service can result in account suspension or fund freezes. On Polymarket in particular, where withdrawal processes depend on blockchain wallet access, a suspended account during a withdrawal attempt is a real operational risk.
There are also the limits of what VPNs can fix. If a platform demands KYC verification during onboarding or flags your account for identity checks, a VPN cannot substitute for actual documentation. The industry is moving, deliberately, toward identity-based access rather than IP-based access - which is a much harder wall to work around.
Conclusion: stricter regional barriers are the new standard
Kentucky's lawsuits are not an isolated event. They are the latest data point in a clear trend: prediction markets, which operated for years in a regulatory gray zone, are being pulled into formal legal frameworks whether they want to be or not. States are asserting gambling jurisdiction. The federal government is asserting CFTC preemption. And platforms caught in between are tightening their own enforcement systems to manage the legal exposure.
For users, the window of open, frictionless access is narrowing. VPNs remain a viable tool in certain configurations, but they are increasingly a workaround for a system that is actively working to close that door.
The direction of travel is clear: prediction markets are becoming regulated financial products. The question is not whether oversight is coming, but which level of government gets to define what that oversight looks like.
