New York sues Kalshi for running an illegal gambling operation

New York has a message for Kalshi: the house doesn’t always win. On July 31, 2026, Attorney General Letitia James and Governor Kathy Hochul filed a lawsuit against KalshiEX LLC in Manhattan state Supreme Court, accusing the prediction market platform of operating an unlicensed gambling business in direct violation of state law. The state is seeking an injunction to shut down Kalshi’s operations in New York, full restitution for affected users, and fines that could reach three times the company’s illegal profits. What New York is actually alleging The core of the complaint is straightforward: Kalshi has been letting people bet on sports outcomes without the licenses or tax obligations that every other sports betting operator in New York has to satisfy. New York requires mobile sports bettors to be at least 21 years old. Kalshi’s platform, the state alleges, was accessible to users between 18 and 20. Kalshi launched in 2021 as a federally regulated prediction market, initially focused on event contracts around things like economic data and political outcomes. When the company expanded into sports markets in 2025, it stepped into territory New York considers firmly within its own juri...