US Prediction Market Legal Battle Escalates: Nevada and New York Target Kalshi

Published Aug 19, 10:00 AM UTC

The legal battle over prediction markets in the U.S. has intensified, with major actions against Kalshi, a leading prediction market company. In Nevada, a settlement agreement fell apart after state investigators bypassed Kalshi's geofencing, leading to accusations of bad faith from both sides. Kalshi faces potential daily fines of $120,000. More significantly, New York Attorney General Letitia James filed a lawsuit on July 31, alleging Kalshi operates as an illegal gambling platform by offering unlicensed sports betting contracts, including to underage users. The lawsuit seeks to recover all profits from the operation. Kalshi had previously sued New York to block enforcement, but a federal court denied its motions. The core dispute centers on whether prediction markets are regulated financial products or illegal gambling, with states asserting the latter.