New York Takes Kalshi to Court Over Unlicensed Gambling

New York has sued prediction market platform Kalshi, accusing it of running an illegal gambling operation without a state license and letting users under 21 place bets on sports and other events.

The lawsuit was filed by New York Attorney General Letitia James and Governor Kathy Hochul, seeking to stop Kalshi from operating in New York. They argued in the lawsuit that the platform should be regulated under state gambling laws.

Kalshi is currently regulated by the federal Commodity Futures Trading Commission (CFTC) and argues that its event contracts fall under federal rather than state oversight.

New York's lawsuit disputes that position, particularly for sports-related contracts. The state says Kalshi is offering sports betting without a license from the New York State Gaming Commission and is therefore avoiding the taxes and consumer protection rules that apply to licensed sportsbooks.

The state also alleges that Kalshi allowed New Yorkers aged 18 to 20 to participate, despite New York's minimum age of 21 for mobile sports betting. Officials said the platform's lack of state licensing leaves users without protections that apply to licensed gambling operators.

This lawsuit is the latest in a wider set of disputes between prediction markets and state gambling regulators. Other states, including Nevada, New Mexico, Arizona, and Washington, have also challenged Kalshi's operations, while the CFTC maintains that it has federal authority over prediction markets.