New York is seeking at least $36 billion in damages in a lawsuit filed against Kalshi in the middle of the night that bills the prediction-market platform as an “illegal gambling operation.”
The suit, filed just after midnight Thursday night in New York state court by governor Kathy Hochul and attorney general Letitia James, includes eight causes of action. The suit claims Kalshi violated the New York State Constitution and the Federal Interstate Wire Act, which prohibits interstate transmission of information that helps in the placing of bets on any sporting event or contest.
New York seeks at least $36 billion in compensatory damages, an amount that would include Kalshi returning money to customers, paying a $100,000 civil penalty for each illegal sports bet offered in New York, and more. Kalshi is headquartered in New York City.
“No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple,” James said in a statement. “By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process. We are taking them to court to uphold our laws and protect New Yorkers.”
Kalshi took quick action, removing the case to federal court, which it believes could be a more favorable venue than state court. The CFTC—the federal regulator that oversees prediction markets—also moved quickly, asking for an emergency ruling that would stop the AG from pursuing enforcement actions against Kalshi or any other CFTC-registered platform.
