New York sues prediction market platform Kalshi, seeks $36 billion and shutdown

New York Attorney General Letitia James filed a 32-page complaint in Manhattan Supreme Court seeking to bar Kalshi, a prediction-market platform, from operating and to impose $36 billion in penalties. The state argues that Kalshi functions as an unregulated sports-betting service and that its platform, which is open to users 18 and older, violates New York law that requires a minimum age of 21 for sports wagering.

"New York’s gambling laws protect children from underage betting and help combat gambling addiction," James said, adding that Kalshi is "running an illegal operation and harming New Yorkers."

Kalshi denied the allegations, with spokesperson Elisabeth Diana calling the lawsuit "political theater" and warning that a shutdown would push New Yorkers to offshore services. The company maintains that it should be regulated by the federal Commodity Futures Trading Commission rather than state gambling authorities.

The lawsuit follows a recent federal court decision that rejected Kalshi’s attempt to avoid state regulation. More than a dozen states are currently challenging prediction-market platforms over whether they fall under gambling statutes. Industry observers note that the case could expose Kalshi executives to personal liability and affect the broader market for prediction contracts.