New York has sued prediction-market platform Kalshi, alleging it operates an "illegal gambling operation" without state authorization. "No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple," said New York Attorney General Letitia James in a press release announcing the lawsuit. "By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process." CNBC reports: In a case filed in a Manhattan state court (PDF), the lawsuit claims that Kalshi accepts wagers as a gambling business in disregard for the state's constitution and laws by not being registered with the New York State Gaming Commission. Governor Kathy Hochul in the press release said the state is taking the action to stop what it views as illegal behavior and bring the company into compliance with New York law. The lawsuit is seeking a permanent injunction against Kalshi.

The suit by the state is also seeking a total restitution to users who have placed trades on the platform, a $100,000 penalty for each attempt to offer sports wagering, and another penalty three times the amount the company has gained while allegedly operating in violation of New York law. The state estimates that could total $36 billion.

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