- New York sued Kalshi over claims that it operates an illegal gambling platform without a state license.
- Attorney General Letitia James wants the court to block Kalshi from offering event contracts in New York.
- The lawsuit seeks at least $36 billion in damages, pending a full review of Kalshi’s revenue.
- New York also wants user restitution, repayment of proceeds, and penalties equal to three times Kalshi’s gains.
- State officials claim Kalshi allowed betting on sports, elections, and cultural events without regulatory approval.
New York has filed a lawsuit against Kalshi, accusing the prediction market platform of running an illegal gambling business in the state. The case seeks to stop the company from offering event contracts and demands at least $36 billion in damages.
Attorney General Letitia James filed the lawsuit on Friday. Her office claims Kalshi lets users bet on sports, elections, culture, and events without a state gaming license.
Kalshi Faces New York Gambling Lawsuit
The complaint argues that Kalshi’s event contracts meet New York’s legal definition of gambling. State officials say the company operates without approval from the New York State Gaming Commission.
The lawsuit also claims the platform exposed residents to financial risk. It says some users may have been younger than New York’s legal gambling age of 21.
New York filed a motion for a temporary restraining order. The state wants the court to block Kalshi from offering the disputed contracts while the case moves forward.
The attorney general is asking for full restitution to users and the return of revenue linked to the contracts. The filing also seeks penalties worth three times the company’s gains and $100,000 for each offering.
Court documents estimate that compensatory damages could reach at least $36 billion. That figure may change after the company provides an accounting of its operations and revenue.
Federal and State Regulators Clash
The Commodity Futures Trading Commission filed its motion on Thursday. It asked a court to stop New York from taking civil or criminal action against registered prediction market platforms.
The CFTC argues that federal law gives it authority over event contracts. New York maintains that its gambling laws still apply when platforms offer sports and contracts to state residents.
Kalshi has faced similar legal action in other states. Courts in Michigan and Washington blocked the platform from offering sports-related contracts during ongoing cases.
Minnesota took a different path. A judge there allowed Kalshi and Polymarket to continue operating while a challenge to the state’s prediction market ban moves through court.
Kalshi remains the largest prediction market platform by trading volume. Its monthly volume reached $33 billion in June, while Polymarket and its U.S. platform recorded a combined $13.95 billion.
Be the first to comment