New York's attorney general sues prediction market platform Kalshi, calling it "illegal gambling"

New York Attorney General Letitia James filed a petition in a Manhattan state court on Friday, 31 July 2026 (9 Mordad 1405), against the prediction market platform Kalshi, calling it an "illegal, unlicensed gambling operation". The petition says Kalshi failed to obtain a New York State Gaming Commission licence. Her office is asking that Kalshi forfeit all illegal gains, pay restitution to harmed consumers, and pay fines equal to three times the company's gains.

The case is part of a wider dispute over who regulates prediction markets. The US Commodity Futures Trading Commission (CFTC) claims exclusive jurisdiction over these transactions and has challenged regulatory activity in at least nine states, including New York; it filed an "emergency" motion in federal court late on Thursday to stop New York from applying its gambling laws to Kalshi. States counter that most business on these platforms is sports betting, which they are empowered to regulate.

James filed similar petitions in April 2026 against two other operators, Coinbase Financial Markets and Gemini Titan. At least four states, Massachusetts, Michigan, Nevada and Washington, have won court orders restricting Kalshi's activities. Kalshi, which is based in New York, called the suit "political theater" and sought to move it to Manhattan federal court eight hours after it was filed. New York also objected to Kalshi allowing users aged 18 to 20, while the state's minimum age for mobile sports betting is 21.