New York Attorney General Letitia James has sued prediction market operator Kalshi, alleging the company runs an unlicensed gambling business. The complaint was filed in New York Supreme Court in Manhattan. The state is seeking forfeiture of company profits, restitution for users and a penalty of three times Kalshi's revenue.
The lawsuit claims Kalshi accepts wagers on sports, elections and cultural events without a licence from the New York State Gaming Commission. Governor Kathy Hochul said the company disregards state law. Authorities also allege Kalshi allows users aged 18 and over to participate, while New York requires mobile sports bettors to be 21 or older. The state argues Kalshi's contracts constitute gambling because users stake money on outcomes beyond their control.
Kalshi called the suit 'political theatre'. The company says it operates as a federally regulated exchange under Commodity Futures Trading Commission oversight. States lack authority to regulate or ban federally licensed contracts, Kalshi argues. It warned that restrictions will push users toward offshore platforms with no oversight.
New York is at least the fourteenth state to challenge Kalshi or similar operators. More than 20 federal lawsuits are now pending in US courts over whether prediction markets fall under commodity law or state gambling jurisdiction. States contesting the legality of such platforms include Arizona, Kentucky, Nevada, Ohio, Tennessee, Washington and Wisconsin.
