New York is seeking a full accounting of Kalshi’s bets and customer losses, along with restitution and fines.
New York’s lawsuit could force Kalshi to open its books and reveal the scale of its business in the state.
In a petition filed on Friday, Attorney General Letitia James asked a Manhattan court to order Kalshi to provide an accounting of all bets placed, money lost by customers and payments collected by the company. James said:
“The lawsuit is seeking a court order stopping Kalshi from operating as an unlicensed gambling business and requiring the company to pay fines, forfeit all illegal gains, and pay restitution to users.”
The state is separately seeking $100,000 for each unauthorized offer or attempted offer of sports wagering.
New York Calls Event Contracts Bets
James argues that Kalshi’s contracts meet the state’s definition of gambling because users risk money on uncertain events they can’t control.
Kalshi doesn’t hold a license from the New York State Gaming Commission, the state’s gambling regulator. Its platform is also available to people aged 18 to 20, while New York requires mobile sports bettors to be at least 21, per the press release.
Speaking to Reuters, a Kalshi spokesperson called the lawsuit “political theater,” adding that states “can’t just shut down a federally licensed exchange.”
CFTC Races to Block the Crackdown
Less than an hour before New York filed its case, the Commodity Futures Trading Commission submitted an emergency motion asking a federal court to block the state’s enforcement action.
The CFTC also sued New York in April, arguing that federal law gives it exclusive authority over event contracts offered by registered exchanges.
Kalshi had separately tried to block New York’s gambling laws, but a federal judge rejected its request in July. A federal appeals court then declined to shield the company, clearing the way for Friday’s lawsuit.
Read more: Kalshi in Talks for New Funding Round at $40B Valuation
