New York Sues Kalshi as Legal Pressure on Prediction Markets Intensifies

New York Governor Kathy Hochul and Attorney General Leticia James have filed a lawsuit against one of the most popular prediction market platforms, Kalshi.

The move marks the latest escalation in the growing battle over whether event contracts fall under federal commodities law or state gambling regulations.

Lawsuit Launched

The press release from the New York office informs that James and Hochul have alleged that Kalshi is operating illegal gambling products in the state without the necessary license. Filed in Manhattan state court, the complaint seeks to stop the platform from offering its event contracts to New York residents and requests financial penalties, forfeiture of profits, and restitution for affected customers.

Event contracts, as the lawsuit describes them, allow users to trade on outcomes of sports matches, elections, economic data, and other real-world events. However, they amount to unlicensed gambling under New York law, stated the PR.

Officials also argued that Kalshi permits users between the ages of 18 and 20 to participate, despite the state requiring bettors to be at least 21 years old. The platform, though, still claims that its products are federally regulated derivatives overseen by the US CFTC, not gambling products subject to state gaming laws.

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