New York\u2019s attorney general sued prediction market operator Kalshi on Friday, claiming that its platform violates state laws against illegal gambling.<\/p>\n
In a petition filed in a state court in Manhattan, Attorney General Letitia James said Kalshi failed to obtain a New York State Gaming Commission license to operate its platform, where people trade based on the predicted outcomes of sports, elections and other events.<\/p>\n
The attorney general said such platforms can encourage problem gambling, including by people under age 21, and endanger people\u2019s financial, emotional and physical health.<\/p>\n
She filed similar petitions in April against two other prediction market operators, Coinbase Financial Markets and Gemini Titan, saying all three companies\u2019 so-called event contracts were \u201cquintessentially\u201d gambling.<\/p>\n
\u201cNew York\u2019s gambling laws protect children from underage betting and help combat gambling addiction,\u201d James said in a statement. \u201cNo matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple.\u201d<\/p>\n Prediction markets such as Kalshi and Polymarket have soared in popularity since the 2024 U.S. presidential election, when they fared better than pollsters in predicting Republican Donald Trump\u2019s victory over Democrat Kamala Harris.<\/p>\n Their growth has sparked a flurry of lawsuits and countersuits over the authority of individual U.S. states, rather than the federal government, to regulate the industry.<\/p>\n The U.S. Commodity Futures Trading Commission has claimed exclusive oversight and challenged regulatory activity in at least nine states including New York, which it sued in April.<\/p>\n \u201cIt\u2019s sad to see this type of political theater from the leadership in our own state,\u201d New York-based Kalshi said in a statement. \u201cStates can\u2019t just shut down a federally licensed exchange.\u201d<\/p>\n Less than one hour before New York sued Kalshi, the CFTC filed an \u201cemergency\u201d motion in Manhattan federal court to stop the state\u2019s enforcement activity, calling it \u201coverreach\u201d that would irreparably harm the agency and markets it regulates.<\/p>\n The CFTC filing followed Wednesday\u2019s rejection by the federal appeals court in Manhattan of Kalshi\u2018s request to avoid being subjected to New York\u2019s gambling laws, while it appeals U.S. District Judge Analisa Torres\u2019 refusal on July 8 to issue an injunction against the state.<\/p>\n Kalshi had preemptively sued New York last October to block enforcement.<\/p>\n According to New York\u2019s petition, Kalshi\u2018s prediction markets are gambling because people can wager on events whose outcomes they don\u2019t control, such as who will win the Super Bowl or the reality TV show \u201cBig Brother.\u201d<\/p>\n New York also objected to Kalshi letting 18- to 20-year-olds use its platform, despite a minimum age of 21 under state law for mobile sports betting.<\/p>\n \u201cKalshi has chosen to ignore New York\u2019s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,\u201d New York Governor Kathy Hochul said in a statement. \u201cThis choice has consequences.\u201d<\/p>\n At least four states \u2014 Massachusetts, Michigan, Nevada and Washington \u2014 have won court orders restricting Kalshi\u2018s activities.<\/p>\n In refusing to stop potential New York enforcement activity, Torres found the state\u2019s interests in preventing gambling addiction, preserving the integrity of sports, and avoiding \u200ba proliferation of unregulated contracts \u201cheavily\u201d outweighed Kalshi\u2018s interests in ensuring the primacy of federal law and avoiding \u201cintractable\u201d technology issues for customers.<\/p>\n New York\u2019s lawsuit seeks a halt to Kalshi\u2018s alleged unlawful conduct, the forfeiture of illegal gains, civil fines equal to triple those gains, and restitution to customers.<\/p>\n This post appeared first on https:\/\/www.nbcnews.com<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" New York\u2019s attorney general sued prediction market operator Kalshi on Friday, claiming that its platform…<\/p>\n","protected":false},"author":1,"featured_media":5987,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-5986","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/posts\/5986","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/comments?post=5986"}],"version-history":[{"count":0,"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/posts\/5986\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/media\/5987"}],"wp:attachment":[{"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/media?parent=5986"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/categories?post=5986"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/profitglyph.com\/index.php\/wp-json\/wp\/v2\/tags?post=5986"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}CFTC Challenges New York<\/h3>\n