New York has sued Kalshi Inc.'s trading subsidiary, accusing it of running an illegal, unlicensed gambling operation in the state. The lawsuit adds a major legal hurdle for the prediction market industry, which has won support from the Trump administration.
The action comes after a federal judge earlier this month denied Kalshi's attempts to intervene against the state's Gaming Commission. Kalshi, a platform that allows users to bet on future events, now faces legal scrutiny from state regulators.
The suit alleges that Kalshi's activities constitute gambling under New York law, and that the company lacks the required license to operate in the state. This is the latest in a series of legal battles for the prediction market industry, which has been expanding despite regulatory uncertainty.
Neither the company nor the state has commented publicly on the specifics of the case. The lawsuit seeks to stop Kalshi's operations in New York, potentially affecting its users in the state.
The judge's earlier ruling denied Kalshi's bid to block the Gaming Commission from taking action, clearing the way for the state to pursue this lawsuit. The outcome could have broader implications for how prediction markets are regulated across the country.