New York has sued prediction-market operator Kalshi, accusing it of offering illegal, unlicensed gambling in the state.
The lawsuit alleges that Kalshi allows people ages 18 to 20 to participate, even though New York requires mobile sports bettors to be at least 21.
State officials are seeking restitution for affected consumers, forfeiture of alleged illegal gains, and fines totaling three times those gains.
New York has filed a lawsuit against KalshiEX, alleging that the company is operating an illegal gambling business under the guise of a federally regulated prediction market.
Gov. Kathy Hochul and Attorney General Letitia James announced the lawsuit, saying Kalshi has made its website and mobile app available to New Yorkers without obtaining a license from the New York State Gaming Commission.
Kalshi allows customers to buy contracts tied to the outcomes of future events. Its markets cover subjects including sports, elections, and popular culture. A contract generally pays out if the event predicted by the customer occurs.
The company launched in 2021 and began offering what it calls sports “trading” in 2025. Kalshi has maintained that its event contracts are financial products rather than conventional wagers.
New York officials reject that distinction.
“No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple,” James said in announcing the case.
The allegations have not yet been proven in court, and the lawsuit represents New York’s account of Kalshi’s business practices.
State says Kalshi lacks a gambling license
According to the New York attorney general’s announcement, Kalshi’s contracts meet the state’s definition of gambling because customers put money on uncertain events that are outside their control or depend on chance.
The state alleges that Kalshi did not obtain the required gaming license or comply with obligations imposed on licensed casinos and mobile sportsbooks. Those obligations include consumer protections and the payment of taxes that help support public schools, youth sports, and programs addressing problem gambling.
New York’s lawsuit seeks a court order preventing Kalshi from continuing to operate as an unlicensed gambling business in the state.
Officials are also asking the court to require Kalshi to return money to consumers who were harmed, surrender revenue earned through its allegedly illegal activities, and pay fines equal to three times those gains.
Underage gambling concerns
A central concern raised by the state is Kalshi’s reported minimum customer age of 18. New York requires customers to be at least 21 to participate in legal mobile sports betting.
The attorney general’s office said making prediction markets available to people between 18 and 20 exposes younger consumers to financial losses and an increased risk of developing gambling problems.
“New York’s gambling laws protect children from underage betting and help combat gambling addiction,” James said.
The case follows an October 2025 cease-and-desist demand from the New York State Gaming Commission, which accused Kalshi of operating an unlicensed mobile sports wagering platform.
New Yorkers can check whether a gambling service is authorized through the Gaming Commission. Suspected gaming fraud or misconduct can be reported anonymously to the attorney general’s office online or by calling 1-800-771-7755.