New York Files Lawsuit Against Kalshi Over Alleged Illegal Gambling Activities

New York is taking legal action against Kalshi, alleging that the prediction market is operating an “illegal gambling operation.” The lawsuit, filed by Attorney General Letitia James, claims that Kalshi is violating state laws by accepting bets without the necessary license from the state’s gaming commission.

An investigation by the Office of the Attorney General (OAG) revealed that Kalshi poses “serious personal and financial risk” to New York residents, including individuals under the legal gambling age of 21. The state is seeking a court order to prevent Kalshi, which is based in New York, from continuing its operations in the state and to provide restitution to customers who have placed bets on the platform.

New York’s lawsuit adds to similar actions from states like Nevada, New Mexico, Arizona, and Washington against Kalshi. While some states, including Wisconsin, Illinois, and Rhode Island, have tried to implement regulations for Kalshi and other prediction markets like Polymarket, they have encountered resistance from the federal government. The Commodity Futures Trading Commission (CFTC) asserts it has “exclusive jurisdiction” over prediction markets, but many states contend that this authority does not extend to sports betting.

“It’s disappointing to witness this kind of political maneuvering from our state’s leadership,” said Elisabeth Diana, Kalshi’s head of communications, in a statement. “This would ultimately harm New Yorkers, pushing them to seek alternatives offshore.”

In addition to concerns regarding state gambling laws, Kalshi has raised alarms about potential insider trading. Recently, it was reported that President Donald Trump’s teleprompter operator made $100,000 by placing bets on Kalshi related to Trump’s speeches.