The state of New York has sued Kalshi, alleging that it operates an unlicensed gambling business. Attorney General Letitia James stated that Kalshi's event contracts are illegal bets, including on sports, elections, and culture, and alleges that the platform allows underage wagering.
The lawsuit, filed in the New York Supreme Court, seeks to bar the company from operating an unlicensed gambling business and demands an accounting of customer bets, losses, and company profits.
- The state is seeking a penalty equal to three times Kalshi's gains from the activity, plus $100,000 for each unauthorized or attempted wager offer.
- Attorney General James noted that New York's gambling laws protect children from underage betting and help combat gambling addiction.
Kalshi, which targeted a $40 billion valuation during a June funding round, and the prediction markets sector are facing legal challenges across the U.S.
“It's sad to see this type of political theater from the leadership in our own state,” said Elisabeth Diana, Kalshi's head of communications.
