NY looks to shut down Kalshi, have it pay $36 billion in new lawsuit

Key Points:

• New York Attorney General Letitia James filed a lawsuit against prediction market platform Kalshi, accusing it of operating as an unregulated sports betting platform and violating state laws, including the minimum betting age of 21.
• The 32-page complaint seeks an injunction to shut down Kalshi's operations in New York and demands $36 billion in penalties, alleging the platform facilitates illegal gambling without necessary safeguards.
• Kalshi denies any wrongdoing, criticizing the lawsuit as political theater and warning it could drive New Yorkers to offshore betting platforms; the company argues it should be regulated federally by the Commodity Futures Trading Commission.
• The lawsuit follows federal court rulings against Kalshi in a related case and is part of a broader conflict involving multiple states over whether prediction markets fall under state gambling laws or federal regulation.
• Legal experts warn that the lawsuit could expose Kalshi executives to personal liability and impact the company’s operations nationwide, while Kalshi claims it was in negotiations with New York officials about tax regulations on wagers.