New York Attorney General Letitia James has filed a lawsuit against Kalshi, a prediction market platform, alleging it operates an unlicensed gambling business in the state. The investigation led by her office concludes that Kalshi's prediction markets qualify as gambling under New York law. The legal action seeks to halt Kalshi's activities, recover profits from its purportedly illegal operations, compensate affected consumers, and impose penalties on the platform.
The lawsuit claims that Kalshi is providing contracts based on uncertain event outcomes without the necessary permit from the New York State Gaming Commission, thus avoiding the licensing and tax obligations that regulated gambling operators must follow. Additionally, it notes that Kalshi allows users aged 18 and older to participate, while New York mandates a minimum age of 21 for mobile sports betting.
This legal move follows a July ruling by U.S. District Judge Analisa Torres, who denied Kalshi’s motion to prevent New York from applying its gambling laws, asserting that federal commodities law does not supersede state gambling regulations. New York Governor Kathy Hochul remarked that Kalshi has disregarded the state's gaming laws and must accept the consequences. Attorney General James emphasized that prediction markets operate as "gambling platforms, plain and simple." This case contributes to the mounting legal questions surrounding whether prediction markets should fall under federal commodities law or state gambling regulations.
