New York Attorney General Seeks to Ban Kalshi Over Alleged Illegal Betting

^{New York Attorney General Letitia James}

New York Attorney General Letitia James has filed a lawsuit against prediction market platform Kalshi, accusing it of operating an illegal gambling business, Reuters reported.

State authorities argue that Kalshi’s contracts on the outcomes of sporting events, elections, television shows and other events are effectively bets. The company, however, does not hold a license from the New York State Gaming Commission.

Kalshi users can buy contracts whose value depends on whether a particular event occurs.

Prosecutors say the model is fundamentally no different from gambling, as customers risk money and receive a payout based on an outcome beyond their control.

The lawsuit also raises concerns about the age of Kalshi’s customers. The platform is available to users aged 18 and over, while the minimum legal age for sports betting in New York is 21.

State authorities are seeking to stop Kalshi’s allegedly illegal operations in New York, recover its profits, impose financial penalties and secure refunds for customers.

Kalshi has rejected the allegations. The company says it is a federally registered exchange operating under the supervision of the US Commodity Futures Trading Commission. It argues that individual states do not have the authority to prohibit the activities of a federally regulated platform.

James previously joined attorneys general from other states in supporting a lawsuit brought against Kalshi by the Massachusetts attorney general’s office. New York prosecutors have now filed their own case against the platform.

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