New York officials have sued prediction market platform Kalshi, labeling it an illegal and unlicensed gambling operation. The state is seeking to halt the company's operations and force it to forfeit its profits. New York joins a growing number of U.S. states using gambling laws to crack down on prediction market operators, including Kalshi and Polymarket.
New York Attorney General Letitia James’s office argues that the platform meets the legal definition of gambling because users bet on events outside of their control in a game of chance. This legal challenge follows a recent decision by a federal judge who denied Kalshi's attempts to intervene against the state's Gaming Commission.
Kalshi and other platforms argue that they are federally licensed and regulated, asserting that states have no authority to govern them. While the company describes itself as an event contracts exchange rather than a traditional sportsbook, the situation has led to a dispute with the Trump administration and pushback from federal regulators over who regulates the fast-growing prediction market.