Kalshi, a prediction market platform where users can bet on far more than sports outcomes, has come under fire in the state of New York. Last week, Gov. Kathy Hochul and AG Letitia James announced that the state is suing Kalshi, framing the company as an “illegal gambling” operation.
The rise of Kalshi in recent times has been tied to several controversies, including gearing its platform for younger users, betting on the Gaza conflict, and bets on the demise of Iran’s Supreme Leader Ali Khamenei.
Gov. Hochul and AG James are going after the Manhattan-based operation, citing that the platform has sidestepped gambling laws in the state and is operating outside the normal environs of similar companies.
From the press release announcing the lawsuit:
“Kalshi has chosen to ignore New York’s 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,” Governor Hochul said. “This choice has consequences, and working closely with Attorney General James, New York is taking action to stop this illegal behavior and bring Kalshi into compliance, because no company is above the law.”
“New York’s gambling laws protect children from underage betting and help combat gambling addiction,” said Attorney General James. “No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple. By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process. We are taking them to court to uphold our laws and protect New Yorkers.”
The press release zeroes in on the fact that the company has not obtained a license from the New York State Gaming Commission and has not paid the expected taxes that casinos and other gambling platforms do in order to operate in the state. The press release does state that the company’s operation meets the legal definition of gambling, but without paying the state taxes to the Gaming Commission, they’re breaking the law.
The state is asking the court to order the company to forfeit all illegal gains, distribute restitution to consumers, and pay fines equal to three times the gains the company made in the operation.
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Photo: Getty