New York Attorney General Letitia James has filed a lawsuit against Kalshi, a prediction market platform, alleging that it operates an unlicensed gambling business in the state. The Attorney General's office concluded that the platform's prediction markets qualify as gambling under New York law. The purpose of the lawsuit is to halt Kalshi’s purported illegal operations, retrieve profits gained from these activities, provide compensation to consumers affected, and enforce penalties.
The lawsuit highlights that Kalshi offers contracts based on uncertain events without proper authorization from the New York State Gaming Commission, thereby avoiding the necessary licensing and taxation that regulated gambling operators must comply with. Moreover, it notes that Kalshi permits users aged 18 and over to trade on the platform, while New York law mandates that participants in mobile sports betting must be at least 21 years old.
This legal action follows a July ruling by U.S. District Judge Analisa Torres, who denied Kalshi's request for an injunction against New York’s enforcement of its gambling laws, ruling that federal commodities law does not preclude state gambling regulations. New York Governor Kathy Hochul stated that Kalshi has disregarded the state’s gaming laws and must face repercussions. Attorney General James firmly stated that prediction markets are "gambling platforms, plain and simple." This lawsuit contributes to the ongoing legal debate regarding whether prediction markets should be regulated by federal commodities law or state gambling laws.
