New York Sues Prediction Market Firm Kalshi, Alleging ‘Illegal Gambling Operation’

New York Attorney General Letitia James sued prediction market firm Kalshi for operating an 'illegal gambling operation' without state licenses, arguing that its event contracts function as sports betting under state law. The lawsuit claims Kalshi circumvents regulations by offering wagers on sports and cultural events and allows underage betting, seeking to block its operations and impose fines. The case highlights a jurisdictional dispute between state regulators and the federal Commodity Futures Trading Commission (CFTC), which classifies such contracts as federally regulated swaps.