New York Attorney General Letitia James has sued prediction market platform Kalshi, accusing the operator of running an unlicensed bookmaking business. The suit seeks to bar the company from operating in the state, recover illegal profits, award restitution to users and impose penalties. The claim is valued at $36 billion before fines and legal costs.
State authorities argue that Kalshi's prediction markets meet the definition of gambling under New York law: users stake money on outcomes they cannot control. The company operates without a sports betting licence and violates the state constitution, penal code and pari-mutuel wagering law. The complaint also notes that Kalshi accepts wagers from users aged 18 to 20, while the legal minimum age for online betting in New York is 21.
In October 2025 the state gaming commission sent Kalshi a cease-and-desist order. Rather than comply, the operator filed a counter-suit in federal court. On 7 July, US District Judge Analisa Torres denied Kalshi's request for a temporary restraining order against enforcement. On 29 July, the Second Circuit Court of Appeals also refused to stay proceedings.
Responding to the state's suit, Kalshi spokesperson Elisabeth Diana called the action 'political theatre' and said states cannot simply shut down a company with a federal licence. She added that a ban would push New York residents onto offshore platforms. Immediately after the suit was filed, Kalshi removed the case to federal court, citing jurisdiction under the Commodity Exchange Act. Similar attempts in Massachusetts, Nevada, Michigan and Washington failed — federal courts remanded those cases to state courts.
