ALBANY, N.Y. (WNYT) – New York is suing Kalshi, saying the company ran an illegal gambling platform that let users bet on sports and other events without a state license.
Gov. Kathy Hochul and Attorney General Letitia James announced the lawsuit and said an Office of the Attorney General investigation found Kalshi was operating illegally in New York. According to the announcement, the state wants a court order to stop Kalshi’s business in New York and force the company to pay fines, give up illegal gains and provide restitution to users.
“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,” Hochul said. “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.”
“New York’s gambling laws protect children from underage betting and help combat gambling addiction. No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple. By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process. We are taking them to court to uphold our laws and protect New Yorkers,” James said.
What is alleged?
The lawsuit says Kalshi’s prediction markets meet New York’s legal definition of gambling because users are betting on uncertain outcomes that are outside the bettor’s control or depend on chance. The state also says Kalshi did not get a license from the New York State Gaming Commission, which licensed casinos and mobile sports betting platforms must have.
The governor’s office said Kalshi’s platform was available to users ages 18 to 20, even though New York law requires people to be at least 21 to take part in mobile sports betting. It also said gambling tax revenue helps fund public schools, sports programs for underserved youth and problem gambling education and treatment.
What happens next?
The Office of the Attorney General is asking the court to make Kalshi forfeit all illegal gains, provide restitution to harmed consumers and pay fines equal to three times the gains tied to the alleged illegal conduct. The state said this follows earlier enforcement actions tied to gambling and prediction markets.
In October 2025, the Gaming Commission demanded that Kalshi stop operating an unlicensed mobile sports wagering platform, according to the release. Attorney General James also urged New Yorkers to make sure gambling platforms are registered with the Gaming Commission and to report suspected gaming fraud to OAG online or by calling 1-800-771-7755.
NewsChannel 13 reached out to Kalshi for comment.
“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,” spokesperson Elisabeth Diana said.