New York has launched a legal battle against prediction market company Kalshi, alleging the platform works like a gambling service without the required state license.
State officials argue that users are placing bets on uncertain events, making the platform subject to New York’s gambling laws.
They claim Kalshi violates laws prohibiting betting on New York college sports and game bets by under-21 users. The lawsuit could affect how the prediction market operates in the state, although it does not seek to shut down the company.
Kalshi strongly disagrees with the claims. The company says it is a federally regulated exchange overseen by the Commodity Futures Trading Commission (CFTC), not a gambling business. It also argues that states cannot regulate products already approved under federal law.
New York Attorney General Letitia James, who filed the lawsuit, said Kalshi is trying “to avoid the legal and financial consequences of New York’s close regulation of gambling.”
New York wants the court to require Kalshi to comply with state gambling rules, pay financial penalties, return profits earned through the platform, and provide restitution to affected users if the state prevails.