New York has filed a lawsuit against prediction market company Kalshi, alleging the platform has been operating an illegal online gambling business that allows users to bet on sports, elections and other events without a state license.
Gov. Kathy Hochul and Attorney General Letitia James announced the lawsuit this week, seeking to halt Kalshi’s operations in New York and recover financial penalties.
State alleges Kalshi violated New York gambling laws
According to the lawsuit, Kalshi launched in 2021 as a prediction market where users could wager on the outcome of future events. In 2025, the company expanded to sports-related markets, advertising legal sports “trading” to users nationwide.
The Office of the Attorney General alleges Kalshi’s prediction markets meet New York’s legal definition of gambling because users wager on uncertain future events that are outside their control.
State officials say Kalshi has been operating without a license from the New York State Gaming Commission, allowing it to avoid regulations and taxes required of licensed casinos and mobile sports betting operators.
Lawsuit seeks fines, restitution and halt to operations
The lawsuit asks the court to:
Officials also allege Kalshi allows users ages 18 to 20 to participate, while New York law requires bettors to be at least 21 years old for mobile sports wagering.
State says gambling laws protect consumers
Hochul said New York’s gambling laws are designed to protect consumers, prevent problem gambling and ensure licensed operators contribute tax revenue that supports public schools, youth sports programs, and gambling addiction education and treatment.
James said prediction markets that allow users to wager money on uncertain outcomes function as gambling platforms and must comply with New York law.
The lawsuit follows an October 2025 cease-and-desist order issued by the New York State Gaming Commission directing Kalshi to stop operating an unlicensed mobile sports wagering platform in the state.
The case remains pending.
This article originally appeared on Rochester Democrat and Chronicle: New York sues Kalshi over alleged illegal gambling
Reporting by New York Connect Team, USA Today Network / Rochester Democrat and Chronicle
USA TODAY Network via Reuters Connect
By New York Connect Team, USA Today Network | USA TODAY Network
