Kalshi’s state-level legal war: New York sued, who is next

New York filed the most aggressive state action against the prediction market industry two days after the Second Circuit denied Kalshi emergency relief on July 29. The suit arrived with a coordinated announcement from the AG and the Governor, counts spanning multiple bodies of state law, a $36 billion damages demand, and a motion to shut down operations in the state immediately. Summary New York Attorney General Letitia James and Governor Kathy Hochul sued KalshiEX on July 31, 2026, in Manhattan Supreme Court, seeking at least $36 billion in compensatory damages, triple-gains penalties, and $100,000 per unauthorized sports wagering offer. The state filed simultaneously for a temporary restraining order to halt all Kalshi event contracts in New York immediately, citing evidence that investigators placed real wagers from New York accounts without obstruction. Kalshi, valued at roughly $22 billion with annualized volume of approximately $178 billion, calls the suit “political theater” and argues that its CFTC registration as a designated contract market means exclusive federal oversight. A bipartisan coalition of 38 state attorneys general has already filed an amicus brief supporting ...