New York sues Kalshi over prediction market operations

New York state has filed a lawsuit against prediction market platform Kalshi, accusing the company of operating an illegal gambling business. The case was filed Friday in Manhattan state court and argues that Kalshi is offering wagers without registering with the New York State Gaming Commission. State officials said they want a permanent injunction to stop the company from continuing what they describe as unlawful activity. Attorney General Letitia James said the platform is acting like a gambling operation, while Governor Kathy Hochul said the state is seeking to enforce New York law. Kalshi said it was disappointed by the lawsuit and argued that New York cannot shut down a federally licensed exchange. The dispute adds to a broader legal fight between states and federal regulators over whether prediction markets should be treated as gambling or as financial instruments.