NY Sues Kalshi for $36B Over Illegal Gambling Claims

The lawsuit, filed in New York Supreme Court, accuses Kalshi of violating state gambling laws by allowing users to bet on the outcomes of elections, economic data, and other events without a license. James's office said the platform has processed billions of dollars in wagers since its launch, with the state seeking $36 billion in penalties and disgorgement.

Kalshi, a federally regulated exchange, has argued that its contracts are legal and that it operates under the oversight of the Commodity Futures Trading Commission. The company has previously faced scrutiny from regulators over its event contracts, which it says are used for hedging and speculation, not gambling.

The suit marks the latest escalation in a broader crackdown on unregulated betting platforms. James's office has targeted other companies in the past, including daily fantasy sports operators, for similar violations. Kalshi has not yet publicly responded to the lawsuit.

Legal experts say the case could set a precedent for how prediction markets are treated under state law. If successful, it could force Kalshi to cease operations in New York or obtain a gambling license, which would likely require significant changes to its business model.