New York Sues Prediction Market Platform Kalshi for $36 Billion to Halt Unlicensed Gambling Operations
New York officials filed a lawsuit against the prediction market platform Kalshi to halt its operations and seek $36 billion in penalties for functioning as an unlicensed gambling operation. Attorney General Letitia James and Governor Kathy Hochul announced the suit, claiming that Kalshi's sports-related event contracts are essentially gambling and violate state laws, including the minimum age requirement of 21 for sports betting. Kalshi argues that its platform is a prediction marketplace rather than a gambling site, asserting that users trade against each other like a stock market. The company maintains that it is federally licensed and should be regulated by the Commodity Futures Trading Commission. During the Trump administration, the federal commission took a hands-off approach to prediction markets, leading to a dispute with states over jurisdiction. If successful, the lawsuit could force Kalshi to forfeit all illegal gains and pay restitution to consumers nationwide. Kalshi spokesperson Elisabeth Diana dismissed the state's actions as political theater, noting that the move could drive New Yorkers to use offshore platforms.