Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
New York has sued Kalshi over claims that the prediction market runs an illegal gambling operation. The case seeks penalties that could top $36 billion and an order capable of disrupting the company far beyond its sports contracts.
Good To Know
- New York wants Kalshi barred from operating within or from the state.
- The complaint covers sports, elections, culture and other event contracts.
- Kalshi says CFTC regulation gives states no authority to close its exchange.
Governor Kathy Hochul and Attorney General Letitia James filed the case on July 31, 2026. New York wants Kalshi to surrender revenue, compensate customers and pay civil penalties for allegedly offering wagering without state approval.
Requested penalties include $100,000 for every unauthorized sports wagering offer or attempted offer in New York, plus three times the gain linked to the alleged violations. Court records cited by national media place the possible total above $36 billion, although no judge has approved that figure.
New York Seeks A Wider Kalshi Ban
The requested order does not stop at New York sports customers. State lawyers want Kalshi prevented from running its alleged gambling business “within or from New York.”
Kalshi has its headquarters in New York. As a result, an order covering activity conducted from the state could affect services offered elsewhere in the US.
New York also included contracts tied to elections, culture and other events. The language could place much of the Kalshi prediction market platform inside the case rather than only sports event contracts.
Hochul said:
“Kalshi has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules. This choice has consequences, and working closely with Attorney General James, New York is taking action to stop this illegal behavior and bring Kalshi into compliance, because no company is above the law.”
State officials also allege that Kalshi allowed people aged 18 to 20 to trade sports contracts. New York licensed sportsbooks require customers to be at least 21.
Court Loss Left Kalshi Exposed
Kalshi argues that its event contracts fall under federal commodities law because the Commodity Futures Trading Commission regulates the company as a designated contract market.
However, US District Judge Analisa Torres rejected the Kalshi request for a temporary restraining order and preliminary injunction on July 7. The ruling found that Kalshi had not shown that federal law blocked New York from applying state gambling rules to sports contracts. Kalshi later failed to obtain protection while its appeal continues.
Elisabeth Diana, head of communications at Kalshi, said:
“It’s sad to see this type of political theater from the leadership in our own state. States can’t just shut down a federally licensed exchange. This would also hurt New Yorkers, who would be driven offshore. We love New York, we love New Yorkers, and New Yorkers love our product.”
The legal position remains divided across the US. A federal court recently blocked a Minnesota prediction market ban after finding that the CFTC and operators were likely to succeed on their federal authority arguments. New York, Massachusetts, Michigan, Nevada and Washington have taken a different approach toward Kalshi sports contracts.
The post New York Seeks Up To $36 Billion From Kalshi appeared first on iGaming.org.