New York sues Kalshi for illegal gambling while CFTC seeks emergency restraining order

New York Attorney General Letitia James has sued prediction market operator Kalshi, arguing the company is offering a gambling platform in violation of state gambling laws, and seeking to bar the markets from operating in the state. The lawsuit also seeks at least $36 billion in penalties and restitution ^{[1] [2]}.

In response to New York’s action, the U.S. Commodity Futures Trading Commission (CFTC) asked a court for emergency relief, including a restraining order, to prevent New York from enforcing against Kalshi the day before New York filed its suit. Reporting also describes the dispute as centered on how prediction markets should be regulated ^{[3] [4]}.

The case escalates an ongoing regulatory conflict between federal oversight of prediction markets and New York’s use of state gambling statutes against Kalshi ^{[3] [1]}.