New York sues Kalshi, claims it is 'illegal gambling operation'
New York state has filed a lawsuit against the prediction market platform Kalshi, alleging it operates an illegal gambling business without proper state registration. The state is seeking a permanent injunction and significant financial penalties, while Kalshi maintains that it is a federally licensed exchange.
Why it matters
This case highlights the ongoing regulatory friction between state-level gaming authorities and emerging federally regulated prediction markets.
New York state sued prediction market platform Kalshi on Friday, alleging that the company is running an "illegal gambling operation."
In a case filed in a Manhattan state court , the lawsuit claims that Kalshi accepts wagers as a gambling business in disregard for the state's constitution and laws by not being registered with the New York State Gaming Commission.
"No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple," said New York Attorney General Letitia James in a press release announcing the lawsuit. "By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process."
Governor Kathy Hochul in the press release said the state is taking the action to stop what it views as illegal behavior and bring the company into compliance with New York law. The lawsuit is seeking a permanent injunction against Kalshi.
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