{"id":311509,"date":"2026-08-01T14:59:42","date_gmt":"2026-08-01T14:59:42","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/311509\/"},"modified":"2026-08-01T14:59:42","modified_gmt":"2026-08-01T14:59:42","slug":"ny-sues-kalshi-for-operating-illegal-gambling-operation","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/311509\/","title":{"rendered":"NY sues Kalshi for operating ‘illegal gambling operation’"},"content":{"rendered":"

New York sued the prediction market platform Kalshi for $36 billion on Friday, accusing it of illegally operating a gambling operation<\/a> and exposing young New Yorkers to a potential addiction.<\/p>\n

The state attorney general\u2019s office, in Manhattan Supreme Court papers filed after midnight, asked the court to stop Kalshi from offering contracts for sports and other topics without a gambling license from the New York State Gaming Commission.<\/p>\n

The suit seeks forfeiture of all Kalshi\u2019s gains and restitution to users and\u00a0an order finding the company has repeatedly and persistently broken the law, including by hosting bettors as young as 18.<\/p>\n

\u201cKalshi has chosen to ignore New York\u2019s 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,\u201d Gov. Hochul said in a statement.<\/p>\n

Kalshi has exploded in popularity since its 2021 launch. It prompts users to stake \u201cYes\u201d or \u201cNo\u201d positions on whether something will happen, be it a news event, sports match result, election result, pop culture development, or virtually any outcome. Examples in the suit include: \u201cWill more Americans get vaccinated this week than last week?\u201d<\/p>\n

Critics say the model is a hotbed for insider trading-style corruption. A U.S. soldier who was involved in the capture of Venezuelan leader Nicol\u00e1s Maduro in January faces federal charges in Manhattan<\/a> alleging he pocketed $400,000 on Polymarket by betting the ousted president would be out of office within weeks of the seizure he helped execute.<\/p>\n

Rather than a gambling venue, Kalshi has marketed itself as a democratized financial exchange that provides everyday folk a chance to get rich like traders on Wall Street.<\/p>\n

\u201cNo 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,\u201d AG Tish James said in a statement.<\/p>\n

Reached for comment, Kalshi\u2019s communications chief pushed back on the allegations.<\/p>\n

\u201cIt\u2019s sad to see this type of political theater from the leadership in our own state. States can\u2019t 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,\u201d Elisabeth Diana said.<\/p>\n

The Trump administration has backed sites like Kalshi, where President Trump\u2019s eldest son, Don Jr., was brought on as a strategic advisor<\/a> in January 2025. As Friday\u2019s suit was filed, the Commodity Futures Trading Commission, a regulatory agency meant to curb corruption in the U.S. market, filed a temporary restraining order seeking to halt enforcement action.<\/p>\n

The federal agency\u2019s Trump-appointed chairman, Mike Selig, criticized the AG in a post on X<\/a>.<\/p>\n

\u201cRather than seek reasoned answers from the courts, Letitia James and New York seek to force an unprecedented sudden shutdown of prediction markets nationwide,\u201d Selig wrote, adding the CFTC would defend its jurisdiction.<\/p>\n

In an email, Kalshi\u2019s press office accused New York authorities of trying to \u201cplease the casinos\u201d and said it was \u201chilarious\u201d that the AG wanted restitution for users who have profited $200 million.<\/p>\n

Friday\u2019s suit notes that Kalshi values itself at $22 billion with an annual transaction volume of $178 billion.<\/p>\n

The monumental profits have come at the expense of exposing 18-to-24-year-olds to serious gambling addictions, a population deemed high risk by the state Office of Addiction Services and Supports, the lawsuit alleges. It notes that as of 2022, mobile sports betting had far surpassed casino gambling as the primary reason New Yorkers made gambling-related helpline calls.<\/p>\n

The complaint cites studies showing gambling disorders can lead to suicide and have a devastating impact on household financial health.<\/p>\n

Legalized sports betting has even been found to increase rates of intimate partner violence<\/a>, the lawsuit details.<\/p>\n

\u201cIt is these types of harms that the New York Constitution and gambling laws were intended to prevent in New York,\u201d the complaint reads.<\/p>\n

The suit is the latest development in an effort by multiple states to clamp down on online betting and an escalation of the company\u2019s standoff with New York.<\/p>\n

A Manhattan judge this month rejected a demand for an injunction brought by Kalshi in a suit last year after getting a cease-and-desist letter from New York\u2019s gaming commission.<\/p>\n

Friday\u2019s suit also asks that Kalshi be penalized $100,000 each time it offers sports wagering without authorization and demands a tally of total bets placed, monies lost by customers, and the company\u2019s gains.<\/p>\n","protected":false},"excerpt":{"rendered":"New York sued the prediction market platform Kalshi for $36 billion on Friday, accusing it of illegally operating…\n","protected":false},"author":2,"featured_media":311510,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[85,267,607,9,24,10,12,63,134,136,135],"class_list":["post-311509","post","type-post","status-publish","format-standard","has-post-thumbnail","category-staten-island","tag-latest-headlines","tag-local-news","tag-national-news","tag-new-york","tag-new-york-city","tag-new-york-news","tag-news","tag-nyc","tag-staten-island","tag-staten-island-headlines","tag-staten-island-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/311509","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=311509"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/311509\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/311510"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=311509"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=311509"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=311509"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}