New York Attorney General Letitia James (D) sued prediction market platform Kalshi on Friday, accusing the federally regulated exchange of operating an illegal gambling business in the state, escalating a growing legal battle over whether prediction markets fall under state gambling laws or exclusive federal oversight.The lawsuit seeks to block Kalshi from continuing to offer its contracts in New York, arguing the company has repeatedly violated state gaming laws by allowing users to wager on everything from elections to the weather.“A temporary injunction is necessary to protect the people of the State of New York from Kalshi’s repeated and persistent illegal practices and to contain the irreparable harm that widely available, illegal mobile gambling poses to problem gamblers and populations susceptible to addiction,” the lawsuit states.
What is being alleged?
The attorney general’s office said it is seeking a court order barring Kalshi from operating as an unlicensed gambling business in New York, along with civil penalties, forfeiture of profits, and restitution for users.“Kalshi has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,” Gov. Kathy Hochul (D-NY) said in a statement. “This choice has consequences, and working closely with Attorney General James, New York is taking action to stop this illegal behavior and bring Kalshi into compliance, because no company is above the law.”
