New York Attorney General Letitia James has filed a lawsuit against prediction market operator Kalshi, accusing the company of operating an illegal, unlicensed gambling business in violation of state law.
Filed in the New York Supreme Court in Manhattan, the lawsuit alleges Kalshi offers wagering on sports, elections, culture and other events without a licence from the New York State Gaming Commission. The state is seeking the forfeiture of the company’s profits, restitution for New York consumers and financial penalties amounting to three times its profits.
Governor Kathy Hochul said Kalshi had ignored New York’s gaming laws, which are designed to protect consumers, prevent problem gambling and generate tax revenue for public services.
The complaint also alleges that Kalshi permits users aged 18 to 20 to participate, despite New York requiring customers to be at least 21 to place mobile sports bets. State officials argue the contracts offered by Kalshi constitute gambling because participants stake money on uncertain events that are outside their control.
Kalshi has rejected the allegations, describing the case as “political theatre” and arguing that it operates as a federally regulated exchange under the oversight of the Commodity Futures Trading Commission (CFTC). The company maintains that states do not have the authority to regulate or prohibit federally licensed event contracts and warned that restricting its operations would push consumers towards offshore, unregulated alternatives.
The lawsuit adds to an increasingly complex legal battle over prediction markets in the United States. More than 20 federal lawsuits are now pending over whether companies such as Kalshi and Polymarket should be regulated as financial exchanges under federal commodities law or as gambling operators subject to state gaming legislation.
New York becomes at least the 14th state to take action against Kalshi or similar prediction market operators. Other states, including Arizona, Kentucky, Nevada, Ohio, Tennessee, Washington and Wisconsin, have challenged the legality of the platforms over issues including unlicensed gambling, taxation, underage betting and consumer protection.
The latest action follows a series of legal victories for Kalshi in federal courts, including rulings limiting states’ ability to block its operations while the broader jurisdictional dispute between state regulators and the CFTC continues.
New York Attorney General Letitia James has filed a lawsuit against prediction market operator Kalshi, accusing the company of operating an illegal, unlicensed gambling business in violation of state law. Filed in the New York Supreme Court in Manhattan, the lawsuit alleges Kalshi offers wagering on sports, elections, culture and other events without a licence