New York sues Kalshi for allegedly operating illegal gambling, seeks $36 billion in damages

New York just dropped one of the largest lawsuits in the history of prediction markets. Attorney General Letitia James and Governor Kathy Hochul filed suit against KalshiEx LLC on July 30, alleging the platform has been running an unlicensed gambling operation right under the state’s nose. The price tag New York is asking for: at least $36 billion in compensatory damages, pending a full accounting of Kalshi’s activities. What New York is actually claiming The lawsuit alleges that Kalshi offered event contracts centered on sports, elections, and other outcomes to New York residents without obtaining the necessary state gaming license. The state isn’t just seeking to shut Kalshi down in New York. Officials want full restitution for users, disgorgement of profits, and civil penalties stacked on top of that eye-watering $36 billion damages figure. New York officials also raised concerns about consumer protection, underage exposure, and addiction risks. Kalshi doesn’t see itself as a gambling platform at all. The company is registered with the Commodity Futures Trading Commission (CFTC) and has long argued that its event contracts are regulated financial instruments. But New York isn’t ...