New York is suing Kalshi, the prediction markets platform, for operating without a gambling license. The state filed its complaint in late July, claiming the platform's event contracts function as bets and that Kalshi violated state law by letting residents aged 18 to 20 place wagers.
Kalshi CEO Tarek Mansour pushed back hard on CNBC, arguing the lawsuit isn't about jurisdiction or regulatory gray areas. Instead, he claimed gambling companies are orchestrating the legal attack to protect their turf against a faster-growing competitor. "You have an industry that is disruptive, that is growing fast, consumers are adopting it, and it's threatening a legacy incumbent industry that is unhappy about that," Mansour said. Kalshi operates under Commodity Futures Trading Commission oversight, he added, which should settle the matter.
New York's Attorney General is seeking hefty penalties. The state wants users refunded their losses and has demanded fines of $100,000 for each illegal bet offered to New York residents. The complaint zeroes in on one vulnerability: Kalshi allowed 18 to 20-year-olds to trade, below the state's legal betting age.
The CFTC is backing Kalshi. Chairman Michael Selig said Attorney General Letitia James is attempting what amounts to a nationwide shutdown of prediction markets. The regulator has filed its own lawsuit to defend its authority over the industry. Mansour revealed Kalshi had even offered a 10% tax on New York revenue before the lawsuit landed, but the state rejected the compromise.
This article is for informational purposes and should not be construed as financial or legal advice. Regulatory landscapes for prediction markets remain contested and uncertain.
