New York sues Kalshi prediction market alleging ‘illegal gambling operation’
New York state officials have filed a lawsuit against Kalshi, targeting the prediction market platform for what the state labels an illegal gambling operation. Governor Kathy Hochul and Attorney General Letitia James announced the legal action on Friday, seeking to halt company activity within the state, force the forfeiture of profits, and demand restitution for consumers.
The lawsuit asserts that Kalshi allows users to bet on uncertain outcomes without proper licensing from the state gaming commission. Officials emphasize that such platforms bypass regulations designed to fund public services and prevent gambling addiction. The complaint also highlights concerns over age verification, alleging that the platform permits individuals under the age of 21 to participate in its markets.
Representatives for Kalshi responded to the filing by characterizing the move as political theater. They contend that the company operates as a federally licensed exchange under the supervision of the Commodity Futures Trading Commission. The firm argues that state-level attempts to restrict its services disrupt federal jurisdiction and force users toward offshore platforms that lack oversight.
This case arrives amid a broader wave of legal scrutiny across the United States regarding the classification of prediction markets. While these platforms describe their services as event derivatives similar to stock trading, multiple states have initiated litigation or criminal charges to treat them as gambling businesses. Federal courts currently see numerous cases attempting to resolve the conflict between state gambling laws and federal commodity regulations.