New York Sues Prediction Market Kalshi Over Alleged Illegal Gambling Operation
New York's Attorney General has taken legal action against prediction market operator Kalshi, alleging the company is running an "illegal gambling operation" in the state.
The lawsuit, filed by Attorney General Letitia James, accuses Kalshi of violating New York state law by accepting wagers without obtaining a license from the state's gaming commission. An investigation conducted by the Office of the Attorney General (OAG) determined that Kalshi's platform exposes New York residents to "serious personal and financial risk." Of particular concern, the state's investigation found that the platform may be accessible to individuals under the legal gambling age of 21.
The legal action seeks to prevent Kalshi—which is headquartered in New York—from continuing to operate within the state. The lawsuit also requests that the company pay restitution to affected residents.
Prediction markets allow users to trade contracts based on the likelihood of future events, such as election outcomes or economic indicators. Regulatory scrutiny over whether these platforms constitute gambling has been ongoing, with classification depending on how they are structured and operated.