New York Sues Kalshi for $36 Billion Over Illegal Gambling

New York Governor Kathy Hochul and Attorney General Letitia James filed a lawsuit in Manhattan state Supreme Court on July 31, 2026, alleging that the prediction market platform Kalshi operates as an illegal, unlicensed gambling operation. The state is seeking approximately $36 billion in damages, including civil fines totaling triple the company's gains, the forfeiture of illegal profits, and restitution to customers.

State officials argue that Kalshi avoids state taxes and lacks a necessary license from the New York State Gaming Commission. The lawsuit specifically alleges that Kalshi violates state law by allowing users aged 18 to 20 to bet, whereas New York requires a minimum age of 21 for mobile sports betting. Hochul stated that the action is intended to stop illegal behavior and bring the company into compliance.

Kalshi, which is headquartered in Manhattan, contends that it is a federally licensed exchange and characterized the legal action as political theater. The company asserts that state authorities lack jurisdiction over its operations, citing its 2020 approval as a designated contract market.

The U.S. Commodity Futures Trading Commission intervened by filing for a temporary restraining order to block New York's enforcement. CFTC Chairman Michael S. Selig defended the agency's exclusive jurisdiction over prediction markets, claiming the state is attempting to force an unprecedented nationwide shutdown of such platforms.