New York sues Kalshi over prediction market gambling
New York is suing Kalshi for $36 billion, alleging the prediction market platform operates an unlicensed gambling business.Summary
New York Attorney General Letitia James and Governor Kathy Hochul have filed a lawsuit against Kalshi, seeking at least $36 billion in damages. The state alleges that Kalshi operates an unlicensed gambling business by offering wagers on events like sports and elections without proper state licenses or taxes. The lawsuit includes a motion for a temporary restraining order to immediately halt Kalshi's event contracts in New York.
Kalshi defends its operations by claiming its CFTC registration grants it exclusive federal oversight, a position the company calls "political theater." However, recent court rulings have suggested that federal registration does not necessarily preempt state gambling laws. The legal battle is significant because 90% of Kalshi's monthly volume is concentrated in sports, a category currently facing bipartisan scrutiny in the Senate.
The case is part of a broader enforcement trend, with a coalition of 38 state attorneys general supporting similar actions. If New York succeeds, it could fundamentally reshape the prediction market industry, forcing platforms to either comply with state-specific gambling regulations or exit certain markets entirely.
(Source：Crypto News)