New York has sued prediction-market platform Kalshi, alleging that it is operating an illegal gambling business by allowing users to bet on uncertain events without a state gambling licence. The case matters because it intensifies a growing conflict between state gambling regulators and the federal regulator overseeing prediction markets, potentially affecting how such platforms operate across the US.

Attorney General Letitia James says Kalshi failed to pay applicable taxes, made its service available to people under 21, and violated laws intended to limit underage betting and gambling addiction. New York is seeking forfeiture of alleged illegal profits, consumer restitution and fines worth three times Kalshi’s gains; however, a New Jersey effort to ban Kalshi was overturned by an appeals court in April 2026, while CFTC chairman Mike Selig has criticised New York’s action and defended federal jurisdiction.