New York State Targets Kalshi in Crackdown on Prediction Markets

The legal action centers on the definition of prediction markets as gambling entities. State officials argue that because outcomes on the platform are uncertain and outside the user’s control, they trigger mandatory state oversight that Kalshi has failed to secure. Governor Kathy Hochul emphasized that the platform allows 18-year-olds to participate, defying the state’s 21-plus requirement for sports betting. The lawsuit demands that Kalshi forfeit all profits generated in the state and pay significant fines for its alleged non-compliance.

This confrontation is part of a broader jurisdictional struggle between state authorities and federal regulators. While the Commodity Futures Trading Commission insists that prediction markets fall under its federal purview, New York officials maintain that local laws take precedence. Kalshi’s leadership has dismissed the litigation as political theater, asserting that a state cannot unilaterally shutter a federally licensed exchange. The dispute follows a series of regulatory clashes, including a failed attempt by Kalshi to secure a preliminary injunction against the New York State Gaming Commission earlier this year.