New York vs. Kalshi: State Attorney General Labels Prediction Platform an Illegal Gambling Site

The New York Attorney General has filed a lawsuit against the prediction platform Kalshi, alleging that it violates state laws prohibiting illegal gambling, according to a report by Reuters. In a petition filed in a Manhattan court, Attorney General Letitia James claimed that Kalshi did not obtain a license from the New York State Gaming Commission to operate its platform, where people conduct transactions in which they guess the possible outcomes of events such as sports games and elections.

According to the prosecution, platforms of this type may encourage gambling problems, including among people under 21 who are not legally allowed to gamble, and endanger the financial, emotional, and physical well-being of individuals. Similar petitions were filed back in April against two other prediction platforms, Coinbase Financial Markets and Gemini Titan.

"New York State's gambling laws protect children from gambling and help fight gambling addiction. No matter what name they call themselves, prediction platforms like Kalshi are gambling platforms in every sense," James said in a statement.

No response was received from Kalshi regarding the report. Prediction platforms, led by Kalshi and Polymarket, have gained significant popularity since the 2024 US presidential election, when they predicted Donald Trump's victory more accurately than traditional polls. However, alongside this rise in popularity, they have also attracted more criticism and opposition, including accusations of using insider information to reap high profits.

According to the prosecution, Kalshi effectively offers gambling because it allows people to place money on events whose outcomes they cannot control, such as who will win the Super Bowl or reality shows like 'Big Brother'. New York also opposes the fact that Kalshi allows users aged 18 to 20 to conduct transactions on the platform.

"Kalshi chose to ignore New York's gambling laws, which exist to protect consumers, prevent problem gambling, provide funding for essential public services, and ensure that all companies operate under the same rules. These choices have consequences," added New York Governor Kathy Hochul.