New York State has sued Kalshi for allegedly running an illegal gambling operation in the state, marking another setback for the prediction market platform.
On Friday, New York Attorney General Letitia James filed a lawsuit seeking a court order to block Kalshi from operating in the state and require the company to pay fines and restitution to users.
According to a statement from the attorney general's office, the lawsuit alleges that Kalshi enables users to wager on sports, culture and elections without obtaining a license from the New York State Gaming Commission.
The state argues that the company's prediction markets meet the legal definition of gambling and that Kalshi exposed New York residents — including individuals under the state's legal gambling age of 21 — to "serious personal and financial risk."
The lawsuit also claims that Kalshi has sidestepped its obligation to pay associated taxes.
