New York state sued prediction market platform Kalshi on Friday, alleging that the company is running an "illegal gambling operation."
The lawsuit, filed in a Manhattan state court, claims Kalshi accepts wagers as a gambling business in disregard of the state's constitution and laws by not being registered with the New York State Gaming Commission.
"No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple," New York Attorney General Letitia James said in a press release announcing the lawsuit. "By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process." Governor Kathy Hochul said in the same release that the state is acting to stop what it views as illegal behavior and to bring the company into compliance with New York law. The lawsuit seeks a permanent injunction against Kalshi.
Kalshi, headquartered in New York City, pushed back against the action. "It's sad to see this type of political theater from the leadership in our own state," a Kalshi spokesperson said in a statement. "States can't just shut down a federally licensed exchange… We love New York, we love New Yorkers, and New Yorkers love our product."
- The lawsuit seeks total restitution to users who have placed trades on the platform.
- It seeks a $100,000 penalty for each attempt to offer sports wagering.
- It also seeks a penalty three times the amount the company has allegedly gained while operating in violation of New York law.
