New York Attorney General Letitia James filed a lawsuit last Friday aiming to shut down Kalshi’s prediction markets in the state and seek at least $36 billion in penalties and restitution.
Authorities accuse Kalshi of running unlicensed gambling operations and allowing users under 21 the state's legal gambling age to participate in event contracts linked to sports, elections, and cultural happenings.
The state insists these contracts qualify as gambling under New York law, rejecting Kalshi’s claim that they are federally regulated derivatives. The complaint also alleges the company sidestepped gambling taxes and skipped vital consumer protections.
Alongside the lawsuit, New York requested a temporary restraining order to immediately halt Kalshi’s event contracts within the state. The state's filing demands restitution for affected users, disgorgement of revenues, triple damages, and a $100,000 penalty per violating contract.
Attorney General James emphasized the lawsuit defends protections against underage betting and harmful gambling practices. Governor Kathy Hochul called out Kalshi for ignoring laws designed to protect consumers, fund public services, and level the playing field among businesses.
