New York sues Kalshi for $36B, labels prediction market illegal gambling

Published Jul 31, 07:40 PM UTC

New York Governor Kathy Hochul and Attorney General Letitia James have sued the federally regulated prediction market Kalshi, demanding $36 billion in penalties for operating as an illegal gambling platform within the state. The lawsuit seeks a permanent ban on Kalshi in New York unless it obtains state gaming licenses, full restitution to users, and triple damages on revenue. The state also demands $100,000 per sports gambling offering. The U.S. Commodity Futures Trading Commission (CFTC) has intervened, arguing federal law grants it exclusive jurisdiction over prediction markets. The CFTC has already sued New York and filed for an emergency restraining order to block the state's enforcement actions. Two federal courts have sided with the CFTC, including a 3rd Circuit injunction against New Jersey. The case highlights a growing conflict between state gambling laws and federally regulated prediction markets.