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Ohio regulators captured industry attention in April when they announced plans to fine Kalshi $5 million for “conducting sports gaming without a license.” On Friday, New York Attorney General Letitia James made that planned fine look like a rounding error.
James sued Kalshi on behalf of the State of New York, seeking a total of $36 billion in response to the operator running an “illegal, unlicensed gambling operation.”
“What (Kalshi) offers through its Platform is quintessentially gambling: it allows a bettor to stake or risk money upon the outcome of a contest of chance or a future contingent event not under the bettor’s control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome,” the suit reads in part.
“The outcome of (Kalshi’s) contracts depends to a material degree upon an element of chance, which in fact predominates over any skill of the bettor, notwithstanding that the skill of the bettor may also be a factor.”
The suit arrived on the first possible day after the U.S. District Court for the Southern District of New York denied Kalshi’s request for an injunction pending appeal of its July 7 loss in a case seeking to block the New York State Gaming Commission (NYSGC) from enforcing a cease-and-desist order originally sent in October 2025.
“Exposing young people to online gambling can have damaging effects on their mental and financial well-being. Recent research has shown that gambling among young people is associated with psychological distress, financial difficulties, and increased risk of gambling-related harms in adulthood,” the release reads partially.
A state investigation found that Kalshi, which is headquartered in New York, “persistently advertised Sports Betting on its platform since at least January 23, 2025.” Notably, that predated the Super Bowl by two weeks and happened three days after Donald Trump began his second term of U.S. President, in which he reversed the course of federal regulatory action against prediction markets.
Ohio regulators captured industry attention in April when they announced plans to fine Kalshi $5 million for “conducting sports gaming without a license.” On Friday, New York Attorney General Letitia James made that planned fine look like a rounding error.
James sued Kalshi on behalf of the State of New York, seeking a total of $36 billion in response to the operator running an “illegal, unlicensed gambling operation.”
“What (Kalshi) offers through its Platform is quintessentially gambling: it allows a bettor to stake or risk money upon the outcome of a contest of chance or a future contingent event not under the bettor’s control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome,” the suit reads in part.
“The outcome of (Kalshi’s) contracts depends to a material degree upon an element of chance, which in fact predominates over any skill of the bettor, notwithstanding that the skill of the bettor may also be a factor.”
The suit arrived on the first possible day after the U.S. District Court for the Southern District of New York denied Kalshi’s request for an injunction pending appeal of its July 7 loss in a case seeking to block the New York State Gaming Commission (NYSGC) from enforcing a cease-and-desist order originally sent in October 2025.
Why did New York sue Kalshi?
James highlights in a press release that in addition to flouting state gaming law by offering Sports Betting without a license, Kalshi’s availability to people 18-20 years old violates New York statute as well.“Exposing young people to online gambling can have damaging effects on their mental and financial well-being. Recent research has shown that gambling among young people is associated with psychological distress, financial difficulties, and increased risk of gambling-related harms in adulthood,” the release reads partially.
A state investigation found that Kalshi, which is headquartered in New York, “persistently advertised Sports Betting on its platform since at least January 23, 2025.” Notably, that predated the Super Bowl by two weeks and happened three days after Donald Trump began his second term of U.S. President, in which he reversed the course of federal regulatory action against prediction markets.
