Kalshi calls lawsuit ‘political theater,’ says states can’t shutter federally licensed exchange
New York officials filed a lawsuit Friday against prediction market platform Kalshi, accusing it of operating an “illegal, unlicensed gambling operation” that includes sports wagering. The state is seeking potentially billions of dollars to halt Kalshi’s operations in New York and force the company to forfeit profits generated from what it calls illegal gambling.
Elisabeth Diana, a spokesperson for Kalshi, said in a statement: “It’s sad to see this type of political theater from the leadership in our own state. States can’t just shut down a federally licensed exchange. This would also hurt New Yorkers, who would be driven offshore. We love New York, we love New Yorkers, and New Yorkers love our product.”
The lawsuit adds to a growing legal confrontation between states and the Trump administration over whether the federal government or states have authority to regulate prediction markets. Kalshi and other platforms argue they are federally licensed and regulated, and states have no authority to govern them.
New York is among a growing number of states taking legal action against Kalshi, seeking to classify the platforms’ offerings as illegal gambling. The suit specifically cites sports wagering among the contracts that violate state law. Kalshi maintains its operations fall under federal jurisdiction and that state gambling laws do not apply.