Kalshi faces Nevada and New York legal actions, potential daily fines of $120,000

Published Aug 19, 10:00 AM UTC

The legal battle over prediction markets in the U.S. has escalated significantly. Kalshi, a major prediction market company, faces mounting pressure from state regulators. In Nevada, a settlement agreement collapsed after state investigators bypassed Kalshi's geofencing system, leading to accusations of bad faith from both sides. Kalshi faces potential daily fines of $120,000. More critically, New York Attorney General Letitia James filed a lawsuit on July 31, alleging Kalshi operates as an unlicensed sports gambling platform in violation of state law, including allowing underage betting. The lawsuit seeks to recover all profits from the alleged illegal operation. Kalshi argues its platform is a prediction market, not a sportsbook, but New York officials assert it is functionally identical to gambling. The company had previously sought a federal injunction to block New York's enforcement, which was denied.